4. Create A Positive Plan For Managing Your Finances.
Budget. Yuk. It’s something that is so useful to do but the word sounds so…limiting. Restrictive even.
I hate budgeting. I’ve tried and tried and it never seems to work. There is always the one thing that will make me go over budget and then I feel guilty for spending too much, then I try to scrimp on other things but it doesn’t work, then I lose track of my spending, then I throw it all out because it’s not working again and then – you get the picture. Shoe lovers? We are not people who like to be restricted in our spending!
Budgeting – it’s good, it just makes us feel bad and whatever makes you feel bad you don’t really want to keep doing. Have you ever thought about how the words you use determine your focus? Notice the difference between these phrases: “Don’t fall” vs “Stay on your feet” or “Don’t forget” vs “Remember”. The first instructions are negative instructions – we are more likely to make an error because we are trying so hard not to. With the second they are positive instructions – we just need to keep going in that direction and we don’t feel so bad if we falter. This allows us to quickly bounce back up and get going again every time. So how about we change the word we use when it comes to managing our money from budgeting (focusing on not spending/ spending limits) to something more freeing that puts us in control. Let’s use the word: plan.
Having a plan or making a plan is great. When you plan something, you are in control and you determine how things are done and where they go and it makes you feel good. When you have a budget, mentally you are seeing those things in the budget as limiting – deciding what you are and aren’t allowed to do – whereas when you have a plan you are the one deciding what to do.
Instead of thinking about budgeting, think of managing your finances as creating a plan for your money.
budget financial plan will help you to deal with manage your spending and your debts if you have them. You will have a plan for repaying your debts, paying your bills, saving for the future and even (my favourite!) going shopping. Putting a plan in place also means that you know where your money is going and can happily keep track of it.
So the next time your best friend comes to distract you with a spontaneous shopping trip you can reply breezily “oh, I’m sorry, no can do, it wasn’t in my financial plan for the month” and twirl on outta’ there!
5. Spend Less Than You Earn And Get Out Of Debt.
One of the hardest things for us to do is giving up on getting the latest item that everyone else has. In order to keep up, a lot of us have given in and become attached to our credit cards. With our new found (borrowed) money it opens up a whole other wardrobe and makes us feel powerful – I can buy anything! Unfortunately it is quite deceptive as the thing that seems to bring us freedom now also ties us in chains and limits what we can do in the future.
It can be really easy to spiral out of control and not know how we got ourselves into such a mess. It’s only when we hit rock bottom that we wake up and realise the dire situation we’re in. A lot of people then bury their heads in the sand but it shouldn’t have to be that way.
Determine now that you don’t need any more debt than you already have. On the road to becoming financially fabulous, debt is one of those things that we need to bring to a grinding halt. It’s not easy but it needs to be done. We need to start to do all we can to spend less than we earn and learn how to live on that until we are creating the income we need to live the lifestyle we want. A good financial plan will help us to do this and it will also help us to put plans in place to start paying our debts and making more money.
6. Create a Shopping Allowance (And Stick To It!).
As part of trying to get out of debt a great thing to do is to designate a specific amount for shopping and stick to it. Create this shopping allowance as part of your plan that is there for you to go wild with. Make sure it is reasonable and that you are able to pay all your bills first but at least with this money set aside you know that you wont feel guilty or build up debt if you spend it.
A great thing is that you can find ways to make more money to add to this pot. One thing I like doing do is selling old or unused items on ebay and the money I get from this can go to newer items – it’s a sort of recycling program for my money.
Having a shopping allowance rather than free reign doesn’t sound very fun and can be quite hard at first but the more you do it the more you will enjoy it especially if you see your debts start to decrease. Your future self will thank you for it as will your wardrobe and bank balance.
I find that I have a bit more fun finding new ways to make money as opposed to just putting it on credit. Also, for some of the items that I would have ordinarily just bought before I am now learning to make them!
7. Focus On Cultivating Your Style.
This one is an individual thing but I am a great believer in Style over Fashion and it is easier to manage your money when you are not succumbing to every fashion trend. My opinion is that you should start with the classic pieces that will stand the test of time then add to that, pieces that reflect you. You can then use ‘on trend’ items to accent your signature wardrobe rather than to fill it.
I know this might not work for everyone – some people’s style is to be on trend – but it is a start and a better bet if you want your finances to be healthy. If you want to know how to go about creating your style check out these tips on creating your signature wardrobe.
So what do you think of these 7 steps? Let me know in the comments below.
If you haven’t seen them yet here are steps 1-3
Stay financially fabulous!