Urgh. Budgeting. It’s the worst. And I am probably the worst at it.
I have never been a saver. I like buying and having stuff. I am an emotional spender. I love instant gratification. I don’t plan for emergencies and unexpected spends (like doctors appointments or the physio). But I am trying to better myself and if you are at all like me you probably should too. Have a quick glance over the list I’ve compiled below and see if you fall into the “need to improve” category like myself.
Signs you probably need to step up your budgeting skills:
1) you are living pay check to pay check
2) you are have no emergency fund for unexpected events
3) you are an emotional spender – buying stuff makes you happy (but then often leaves you feeling guilty later)
4) savings are a foreign concept to you
5) you have a hard time making and sticking to budgets
6) you and your credit card are better friends than perhaps you should be
Are you starting to panic that these are statements are a little too close to home? If yes, then buckle in and prepare yourself to think about actually having an emergency fund… However, if you are sitting there with a smug smile on your face and savings in your bank account I would ask you politely to leave this blog post.
My big financial goals at the moment (and I am very slowly getting there) are to pay off my credit card and build up an emergency fund. And in order to do this I am having to take a long hard look at my bad spending habits. I’m lucky that I’m kind of scared of my credit card so I don’t owe very much and it should all be paid off in a month (I am hoping). To help pay it off quickly while still being able to add money towards my emergency fund I have been selling clothes on Trade Me, which is basically the New Zealand version of ebay meets craigslist (apparently this is what’s called a side hustle guys). It doesn’t require much energy or time to list anything on Trade Me so have a check through your wardrobe and see if there are some items you might like to part with if you need/want to make some extra funds. I got rid of clothes that I had stopped wearing and/or didn’t make me feel like fancy and awesome lady when I wore them. Thus not only was I making money and freeing up wardrobe space I was also investing in my mental health.
My very fiscally responsible mum has always told me that I should have at least a thousand dollars saved away from emergencies and after moving to Christchurch, a trip to Japan, moving in with my boyfriend and setting up a new flat what emergency funds I had were well and truly depleted. When extra things pop up that I have to pay for I have no extra money to fall back on and it stresses me out. So I am hoping to put some money aside to help lower my budget stresses. My goal with the emergency fund is that it will give my budget room to breathe so that unexpected trips to the doctor won’t be the cause of panic. At the moment saving wise I am just focused on putting money into my emergency fund account but once that has reached a thousand I think I will move to putting money aside for long term savings and just making sure the emergency fund is kept topped up. My advice when starting to save is to be kind to yourself, understand stuff may and will pop up that might impact your saving goal(s) but just readjust and keep going. Don’t let it be the end of the savings all together because it’s too hard. Sure it might take a little bit longer to reach your saving goal because of this unexpected thing but you will get there. Don’t let a little hiccup send you down a path I know all to well – the oh fuck it path. Avoid at all costs.
It hasn’t been easy to both pay off my credit card and save at the same time but the credit card is almost done, and once it is I think I will be able to stick with the savings (for once). It’s just too stressful living pay check to pay check. I know I am going to (and have already) struggled with my ingrained bad spending habits and my deep desire to treat myself come pay day but I am trying to tell myself that saving and being less stressed is an even better treat. If I am having a crappy day I know some exercise, fresh air and some music is going to make me feel just as good as a spontaneous purchase. But I also know I am not good at going cold turkey on the treat front entirely so I have told myself that once I reach certain milestones in my saving goals I am allowed to go get a couple of winter wardrobe staples for example. This should hopefully help me stick to this long term.
My bad spending habits are mainly centered around pretty dresses and spontaneous decision making, but for other people it can be eating out a lot for example, or having a gym membership they never use. If you are someone who eats out a lot the best thing to do is to find some recipes you are keen to make, hit the supermarket and start making some cool new dishes at home, it’s healthier for your budget and your body. (#hottip always have a list for the supermarket and stick to it, this keeps you on budget while stopping you from buying stuff you don’t need to get). If you have a gym membership you never use get honest with yourself. Either start hitting the gym floor or get rid of it. There is no point paying for something you aren’t using. If you aren’t sure where you money is going, or what your bad spending habits are, a great thing to do is to start tracking your spending, then you can look back and see where your money disappears to and what you might like to cut back on.
If you are keen to start on your own financial journey of redemption you might want to check out a website that I know think of as budgeting bible – The Financial Diet. It’s a super helpful, millennial focused website with so many useful articles. I cannot recommend this website enough. It really got me to start thinking about my pitiful knowledge of and approach to personal fiances. They also do youtube videos and this is a great one to get you started:
Another one of my favourite budgeting resources is Sorted.org. It’s a great New Zealand website that can help you with a range of personal finance issues like tackling personal debt, building a budget and setting saving goals.
Just remember just because you have been bad at money, doesn’t mean you need to keep being bad at money. You got this.