At the top of most financial advice articles there is a statement about budgeting. You know, allocating a specific amount of your income towards different expenses as well as savings. This is supposed to stop people from spending too much money on non-essentials and ensuring there is a commitment to savings.
Other than for the 103 dollar challenge, I have never set myself a spending limit. Even the challenge is just a general limit for all expenses. Firstly because I have an inconsistent weekly income and variable weekly expenses. However, it is mostly because operating at a point of financial limits every week makes me nervous. It fills me with anxiety to think that one week I might need to spend money on something but won’t be able to because I’ve gone over the budget and the money is allocated elsewhere. Does anyone else have this fear about not having money when it’s needed?
So instead of allocating little amounts to each different compartment of your spending, I suggest just keeping your overall expenditure low.
This is achieved by being conscious of the spending that you’re actually doing. That means tracking every single time you spend any amount of money, even if it’s $1.20 for a newspaper. I was never much of a big spender before I began tracking my money, but I have definitely become better at saving since.
It is often difficult to track how much you spend when the majority of transactions you make are of cash. I have managed to find a way around it without always paying by card. Presumably you get paid via bank transfer like most of us, or if you get paid in cash, you put it into a bank account. What you do is record the amount of cash out you withdraw and not the actual spending amounts. That way it shows up in your bank statement along with the other expenses that you pay straight from the account.
Spending consciousness allows me to be motivated to save more money, without the anxiety of having to set a limit on spending. Rather than spend x amount, my goals are always to spend as little as possible. If I have to spend more as a result of unexpected expenses, there is no budget to go over, but I still see it because I’m not able to save as much that week.
I’ve put it up before, but here’s a customisable spreadsheet that I have created to track my own spending. You can use it too.
What do you think about spending consciousness vs budgeting? Do you feel the same as me, or different?
See you soon,
Lauren
firstmillionby30 