The next topic in my ‘Simplify’ class is money. Budgeting your resources to accomplish your goals and obligations. This is your most easily spent and replaced resource. You can even spend it before you earn it. Considering the cost to you in terms of time committed to earn those things, any quest to simplify your life has to take debt into consideration. And then there’s the magical property of time x money = even more money (either spent or saved). Factor in your stress cost and the benefit may not actually be worth so much of your time! I’m certainly not an expert but I can tell you my three steps to getting control of your spending: track, cut, plan.
First step is tracking where your money is going. I can’t convince Mr. Migraine to track his food intake because there’s no obvious correlation but we can’t test any theories without data. Likewise, if you’re hemorrhaging money you have to find out where it’s going before you can bind the wounds or control the bleeding. If you use mostly cards you have all the names of the transactions but not necessarily what you purchased. Is that Amazon charge for books, software, clothes, gadgets, or groceries? What about keeping track of receipts for cash transactions? I recommend using an app to make it easy to track spending no matter the format. Even a simple spreadsheet works. Just use a column for what and why in addition to how much.
Forgetting my triage analogy for a moment my next step is cut. It may be common now but I remember dropping our land line and going all cell for phone service. And it was fairly recently that I managed to un-bundle our internet service so we could cut the cord for the TV bill. Of course our downsizing efforts worked to reduce our utility costs as well as our footprint.
The last step is plan. Plan for your obligations. Plan for the big expenses coming up. Plan ahead for the next vacation or holiday. Just plan. I think it’s a good idea to plan a little bit of flexibility into your budget. Set up a place or an account for stashing that flexibility fund. Money is a lot like rain. Without a drainage system the water just seeps into the ground. You must plan where the money is going before it gets to you.
For a real DIY money management plan I recommend Dave Ramsey.