When living on an extreme budget as I must for the next 5 years. You need to make sure that when you spend money it’s on the things you need not want. This is sometimes the hardest thing to differentiate between a need and a want. We often think we need something but we really just want it.
I generally ask myself the following questions before making any purchase, if I say yes and buy this item what will I have to say no to? It's quite simple If I spend £50 of my disposable income on a pair of shoes that's £50 I can't spend with my family doing something as a family. So, I have to really need those shoes or I'm just choosing myself over my family.
Debt is often the reason most of us find ourselves having to manage our money in such a tight manner, that’s because we said yes to too many things or in my case epically failed at your own business to the point your outgoing are your incomings.
Management of short-term debt, namely credit cards, can be paid off quick using a technique called laddering. You use your food shopping and fuel budgets, to help reduce your credit cards. By paying the budgeted amount into a maxed-out credit card this ensures you can only spend the maximum of what we have. This ensures you are frugal when making purchases. We plan our meals and order our shopping online from a list generated from what’s run out and the minimum that's needed for the week. We try to use up all the leftovers before we buy groceries again. If we throw away food, we remove that amount from the food budget as it's not needed. Every time the credit card ends a month £500 down from the allowable balance. We change the limit to ensure we don't get careless, this helps reduce the monthly interest and helps us to speed up the rate we pay our cards off.
Impulse purchase control, I have destroyed all my bank card and credit cards except one which stays in my draw, when I identify something I need I can't impulse buy I will need to go home and get my card this means I have time to think about how much I want/ need the item. Remember if you really need the item you would probably already own one.
Remove all retail apps from your phone this helps reduce the temptation I used to have over £500 in my Amazon's queue waiting for payday.
I would spend hours and hours searching different things from gadgets to houses never happy with what I had always miserable that I did not have the newest and latest.
Phone before
Now my phone only has food shopping apps as I look who has the cheapest of what I need to plan my menus and enjoy my down time with my family or writing this blog
To control your spending, you need to have a goal. I have a plan our 5-year plan to get out of debt it’s a hard one but it's achievable, not only does the plan get us out of debt it secures our future as once we owe nothing we then own everything we have, and we are safe.
Change is always hard, change when you don’t want to change is impossible. Sometimes change is thrust upon us and we need to embrace it and sometimes we discover a new way of thinking and we realise we have been wrong for years. I hope you find these posts interesting and although you might not agree with some of the content it is all the lessons from my life
Thank you for reading
