Spending Recap
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Spending Recap
The following process is what you have learnt from this lesson.
1 – Understand the difference between what is a need, and what is a want.
2 – Cutting out non-essential spending feels equivalent to giving yourself a raise.
3 – Find something to really motivate you every month when it gets hard not to spend your money and go out with friends.
4 – A zero-based budget means that you take only the amount of money that is actually paid into your account, after taxes and deductions, and then take away from this all of your monthly expenses.
5 – If you have a negative value, then you either need to decrease the amount allocated to some of the categories in your budget, such as groceries or entertainment, or you need to increase your income with a side hustle.
6 – If you have a positive value (extra money) left, then this money needs to go towards savings, or paying off debt.
7 – Don’t buy new if you can buy second hand, and don’t buy second hand if you can borrow.
8 – Using an envelope for each budget option is a great way to stay on budget. By paying cash for items, such as groceries, it is much easier to stay on track and to see how much you are spending.
9 – Once a month review your budget. If there are any categories where you are always falling short, such as groceries, you may need to increase this amount, and decrease from another less important category.
10 – Focus on increasing the savings fund while paying back debt.
We hope you really learnt something from our story with Joy. Now onto the next story with Tshepo …
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