How To Save Without Making A Budget
Most of us want to have extra cash but find it hard to motivate ourselves to make a budget and stick to it. It is easier to free up cash by reducing spending rather than increasing revenue.
The following program was one I saw outlined for a person that had a good job with solid income but he could not clear his credit cards. He was told time and time again to make a budget and stick to it but he couldn’t be bothered sitting down and working out a budget for the expenditures in his life.
There is a simple method to get around making a budget which I will now outline.
First of all get a small paper notebook with a pencil or pen attached. It needs to be small enough to keep comfortably in your pocket, jacket or handbag.
Over the next 2 weeks write down all your purchases (description and amount such as “coffee $3.80”) including payments made by cash, credit cards, debit cards and direct debit (review your bank and credit card statements). At this stage do not change your spending habits but just record where your money is going.
At the end of the 2 weeks take 20 minutes to review where your money was spent. Don’t over analyse, just reflect on what your spending lifestyle looks like.
Over the next 4 weeks repeat the process but this time challenge yourself every time you are about to spend money.
Do I really need to buy coffee and cake? Could I walk or take public transport rather than take an Uber? Do I need that extra drink? Just because the shirt is on sale does that mean I need it? When was the last time I reviewed my insurances? Is my phone plan still the best one for me? Am I really using the gym membership?
I’m not asking you to stop spending but just to challenge yourself and step outside the automatic pilot that a lot of us are on.
The interesting thing about this program is that you are almost guaranteed to reduce your spending simply by the very act of recording what you do. By adding another layer of challenging your spending habits this will further add to the savings. The final layer is to commit to showing someone else your first 2 weeks of spending compared to your next 4 weeks of spending. There is nothing like a public showing to keep the motivation up.
Good luck and let me know how you went with freeing up some cash.