Taking Control of My Finances: A Personal Journey
For years, I had a system in place to save money, but it stopped working for me. I’d gotten comfortable with my spending habits and wasn’t monitoring them closely enough. Between December and January, I spent more than I had in a while, and I missed my monthly retirement contribution. It was a wake-up call. I realized I needed to make changes to my habits and create a new system to help me save more.
Identifying the Problem
After getting engaged, my expenses increased, and I started losing motivation to save. I knew I needed to find a solution, but I’m not a fan of detailed budget spreadsheets. I had to come up with a system that worked for me.
A Planner-Based Solution
I created a planner-based system that helps me track my expenses and stay on top of my savings goals. It’s not perfect, but it works for me. Here’s how I do it:
Step 1: Calculate Income
I calculate my expected income after taxes, including my main income and side hustles. I keep my estimates conservative to avoid overspending.
Step 2: Add Up Expenses
I list all my recurring monthly expenses, from rent to subscriptions, and subtract them from my total income. This helps me identify areas where I can cut back.
Step 3: Anticipate Expenses
I write down anticipated expenses for the month, such as travel or special events, and subtract them from my total. I overestimate to give myself some wiggle room.
Step 4: Calculate Discretionary Spending
I subtract the amount I want to save from my total income, including retirement contributions and other goals. This gives me my discretionary spending amount.
Step 5: Designate No-Spend Days
I pick two days a week as no-spend days, where I rely on what I already have at home. This helps me stick to my daily allowance.
Step 6: Track Spending
I track my spending each day, including whether I stuck to my no-spend goal. If I go over budget, I subtract the overage from a future day’s spending allowance.
The Results
This system has helped me save more than I did last year, about 40% of my net income. It’s not easy, but it’s worth it. By taking control of my finances, I’ve become more mindful of my spending habits and less likely to make impulse purchases.
Your Turn
If you have a unique system that helps you stay on track, I’d love to hear about it. Share your experiences and tips in the comments below!
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