The bud­get co­nun­drum

TICKLISH QUES­TION: WHAT MAY WORK FOR SOME WON’T FOR OTH­ERS

The Citizen (KZN) - - News - Pa­trick Cairns

Aim is to be­come more con­scious of your spend­ing.

Abud­get is one of the most pow­er­ful tools in man­ag­ing your per­sonal fi­nances. It is also, for many peo­ple, one of the least at­trac­tive. Bud­gets can feel re­stric­tive and de­mand­ing. Track­ing ev­ery rand that goes in or out of your wal­let suits some per­son­al­i­ties, but it cer­tainly isn’t ev­ery­body’s idea of time well spent.

This is why, as use­ful as bud­gets are, they don’t al­ways work. Many peo­ple don’t like the idea of hav­ing to ac­count for ev­ery trans­ac­tion and be­ing limited in what they can or can’t buy be­cause of the de­ci­sions they made when they first drew up their plan.

Some peo­ple find them­selves be­ing so de­ter­mined to stick to their bud­get, that they drain all the pleasure out of their money. The big­gest ben­e­fit of a bud­get is that it forces you to think about where your money is go­ing.

By track­ing your trans­ac­tions, you get to see your spend­ing habits. You also get to com­pare these against your in­come and de­cide whether it makes sense to be ap­por­tion­ing the money you earn in the way you do.

If you earn R20 000 a month, and the re­pay­ments on your car are R5 000, does it feel right that a quar­ter of your in­come is go­ing to­wards a de­pre­ci­at­ing as­set? By putting these num­bers down on pa­per, you have a much clearer ba­sis from which to an­swer that kind of ques­tion.

On the neg­a­tive side, how­ever, it can also lead to self-dep­re­ca­tion. When you look at your monthly ex­penses you may feel that you are see­ing a se­ries of bad de­ci­sions and you just can’t help your­self from be­hav­ing this way.

A use­ful way to deal with this is to be­come more con­scious about your spend­ing.

Es­sen­tially, it hap­pens in two parts. The first is at the point of spend­ing the money.

Be­fore you buy any­thing, pause and con­sider if this is some­thing that is go­ing to add some­thing worth­while to your life. Is it a pri­or­ity? What is its pur­pose?

Just tak­ing that mo­ment to con­sider this might stop you from the kind of emo­tional spend­ing that is of­ten prob­lem­atic.

A sim­ple ex­am­ple would be go­ing to a cloth­ing store be­cause you know you need new socks, but when you get there you find there is a sale on shoes. You had no in­ten­tion of buy­ing shoes when you set out, and you do not need a new pair. Al­low­ing your­self to recog­nise that may al­low you to avoid the con­sumer trap that was oth­er­wise wait­ing for you.

The sec­ond step is then to make sure you get a re­ceipt for ev­ery pur­chase you make and im­me­di­ately not­ing down on that slip why you made it. This only needs to be a few words that will re­mind you of what it was for and how you were feel­ing when you spent that money. Keep those slips so that you can re­view them a cou­ple of months later. Look over what you bought and con­sider whether you still feel the same way about how you spent your money.

The aim is to be­come more con­scious of your spend­ing, which is de­cid­edly dif­fi­cult in the im­me­di­ate, con­sumerist world in which we live.

We are bom­barded by op­por­tu­ni­ties to spend our money and they are all dressed up to look as at­trac­tive as pos­si­ble, mainly to ap­peal to our emo­tions.

Be­ing aware of what ac­tu­ally does add to our lives and what doesn’t helps us to ad­dress spend­ing de­ci­sions a lot more ob­jec­tively. It will also help to guide our spend­ing away from the things we don’t re­ally want or need, and to­wards those that we do.

To bud­get or not to bud­get, that is the ques­tion

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