Wednesday, February 25, 2015

Live Like You're Rich When You're Not Part 2


If you haven't read Part 1, ←click this link. In Part two, we are going to discuss how you can fix a poor mentality, and additional information on budgeting.

Fixing a Poor Mentality
Fixing a poor mentality is not an overnight thing, however it can be done.

Speak positive about your finances
Stop saying negative things like "I will never have enough money to...", instead say things like "I will clear my debts, I will save enough by 2016."

Focus on the things that you have
Rather than focusing on what you don't have, be grateful for the things you do have.

Stop stressing yourself about money
Constantly worrying about money will drive you bananas. Don't shorten your lifespan stressing out about money. Yes, money is a necessity, but it can't be what you meditate on day and night.

Do something about your finances
You can't just sit there and wait for money to drop in your lap. Do something. If you're working at a dead-end job, find a better job.

Genuinely give
Have you ever heard, "Give in order to receive"? Believe it or not, this too is a mental thing. Your focus in life, should never be selfishly driven, it should always be about your love for others.When you truly believe in your heart, that it's more important to give to others than to have for yourself, God will automatically bless you with so much more. Whether it's giving your 10% tithes, donating to charity, it's always better to give.
 

How to Budget
Let's say your income is $3000 a month. Go through all your expenses for the month:
 
Rent                                      $800
Grocery                                 $300
Gas                                        $120
Car Insurance                        $250
Cable/Internet/Telephone      $110
*Emergency Fund                  $200
Tithes & Offering                  $330
Daycare                                 $360
Total                                      $2470
 
*An Emergency fund is your current monthly salary multiplied by 6. If you don't already have one, make it your goal to have one. Life is full of unexpected occurrence. You must always be prepared.

Now that you have identified your most important expenses, you will then use your balance, which in this example is $530, to save or do anything else that you might need to do for the rest of the month.
 
Saving                                   $300
Hair                                       $80
Nails                                      $30
Anything else                        $120
Final Total                             $3000
 
Budgeting Tips
✓Stick to your budget every month. Track each dollar spent.
✓If you have excess(E.g. Only spent $80 for gas instead of $120), don't spend it, save it.
✓Don't spend on things that can't be budgeted(E.g. A $1000 flat screen will put you at a minus).
 
Once you fix your financial mindset, and start to budget, I guarantee you, in the long run, you will be able to have the things you want/need, without being head-over-heels in debt. In part 3, we will talk about using your money wisely, investing, money tips..etc. Stay tune!

I hope this helps. 
Do you track every dollar that you spend? Let's have a heart to heart in the comments below.
 
 
 

8 comments:

  1. I do track everything that I spend. However it can be a bit depressing sometimes seeing all those minus signs and one plus sign which is my income as a single mother of two. Any thoughts? Also, what do you do to save on groceries, utilities etc.? For instance, l do all of my errands on one side of town on Saturday to save on gas.

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    1. Hi Dancing in the glory!
      awesome name btw, considering most people have one job, and one means of income, I know the expenses will appear overwhelming and depressing at times. But the key is to limit the expenses as much as possible. Of course there are those expenses that are absolutely necessary, but for those that aren't, avoid them (shopping, buying fast food, etc). In my family, to save on groceries, we try to get the best deals on absolutely everything we buy, we order some grocery items online(prices down here are ridiculous), we use coupon codes. For utilities, we don't have cable( the expensive kind anyways), we use energy efficient light bulbs throughout the house, we don't leave the lights on if we're not in the room, ...etc. Being a stay at home Mom, I avoid driving unnecessarily to save on the gas, I also buy gas when it's on a 'special price'. Try to spend only on things that are absolutely necessary, sometimes I treat myself, but only if I can afford to. I hope this helps. Thanks for stopping by.

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  2. Caribbean QueenMarch 01, 2015

    I like how you set aside money for savings AND an emergency fund. Very smart. I've decided to track every dollar this month, and stick to my budget.

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    1. The Emergency fund is specifically for worst case scenarios(can't touch with a ten feet pole), whereas the savings are for goals such as purchasing a car, building a home, investments. Etc. It's definitely the smartest thing to do with your money.

      I'm so glad you've decided to track your dollars and stick to your budget. Sometimes it's difficult to do, but so worth it in the end. Happy budgeting! Thanks for stopping by.

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  3. I am determined to stick to a budget but it's hard when husband and children get involved! I will keep trying though, your blog is inspiring me!

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    1. Hi Rebecca,
      My husband and kids are involved in the family budget...let me give you an example. So the family budget is all the expenses I mentioned above, plus a specific amount my husband can spend for the month, a specific amount I can spend for the month, and a specific amount we can spend on the kids. So if Kmart has a sale on shoes, and I decide to buy some for the boys, that would be deducted from the kid's budget. If I buy myself cosmetics, that would be from my specific amount for the month. And if hubs buys a cologne, that'd be his. So he tracks his individual monthly amount, and I track the kids and mines, considering I do most of the shopping for them. This way works out great for us, I hope this helps. And keep trying. I'm so glad I can inspire you. Thanks for stopping by.

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  4. Very nice process you have laid out for youself. You should be well on your way to FI. Good job.

    Keep cranking,

    Robert the DividendDreamer

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    1. This process works for me, so I figured it would for someone else. Everyone deserves to have FI. It's the best feeling ever! Thanks for stopping by. :)

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