Finance Fun on Friday
Budgets are boring, right? I would guess that this is how the majority feels about budgeting. But are budgets boring or do we just think that it’s boring simply because we don’t really understand budgeting. Let’s first look at the quote to understand budgeting a bit better.
Do you get that special feeling at the end of the month, that feeling of excitement and happiness spreading through your body and mind? That feeling you get when salary day is coming? Money certainly creates a lot of emotions in us, it can be happiness, sadness, stress, calmness, but can it also be love? Is losing your job, hence your source of income, just like a bad break up?
We focus so much on making money that we stop to think about all the things we do to lose money. The equation of having a lot of money is simple, income minus expenses equal what’s left. If we increase the income we should have more money left, right? That is not always the case. With more money we are able to give in on the temptations to spend, simply because now we can compared to before when it wasn’t financially possible. The more we keep spending the stronger the habit becomes and habits are not easy to break.
It is not always the case that big spenders have a more unhealthy life, but it is often the case that people with unhealthy lives spend more. Your finances and your health are connected in more ways than you might think and bad spending many times are also bad for your budget. Taking care of your finances are equally important as taking care of your health and neither should be neglected.
I talk a lot about investing money in what adds value to your life. This quote very clearly emphasize that there is a difference between what you pay and what you get, and the difference can be quiet big. However, we cannot calculate a difference for each product that would apply for everyone because it is a very personal estimation. The value you get from what you buy is determined by what you value in life (makes sense, right?), and therefore the value will be different for each individual.
Better late than never is a phrase I use a bit too often in life and last week I finally took the time to sit down and fill in my own budget of the year. Yes, I know, it’s 4,5 months late to start. The point is that even if it’s a bit late to start you will still get several great benefits from filling in the previous months and it’s not very time consuming either, it took me less than 1 hour. With your budget in place you can then start to control your personal finances for the upcoming months.
There is this thing about us human beings that we know exactly what we should’ve done once it’s too late to do anything about it. This means that we have known about it all along but for some reason we chose to ignore it or to take no action. Why? Most likely because by ignoring, it led to a more pleasant situation in the moment when we had to make the decision. We simply lack discipline. If we reverse the scenario and look at those who actually make the “right” decision in the moment, these people are often defined as people with discipline. But many of us don’t have that discipline in every aspect of our lives. Those many are also us who have to work out the consequences in the after math.
Having money when you need it can have a huge impact on your life. It means that when unexpected expenses appear it will not be a risk and when opportunities appear in your life money will not hold you back. To be able to manage expenses that weren’t planned we need savings, but we can easily lose track or forget the purpose of the savings when we just stack it on our bank account. It could even be demotivating to start saving when we don’t see why we are doing it. Let’s do something different with our savings, let’s give it a purpose!
We keep thinking “if I only earned more money I could save more”, but we could keep chasing this thought forever. It doesn’t matter how much money we earn if we don’t do anything about our spending habits and actively focus on our personal finances.
The highlight of the day is lunchtime, at least if you, like me, love food. We have around 90 meals per month if we count breakfast, lunch and dinner. That’s many moments of joy but also moments of money spent. Food is often one of our biggest expenses and it is also one of the expenses we can influence a lot if we want to save money.