Spending 102
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Spending 102
After Joy had done her research about what she considered her budget needs, she also looked over her bank statements to see where she was spending her money. Turns out, she was spending around 40% of her monthly salary on just shopping and eating out with friends. Joy realised she needed a budget, and as soon as possible!
So Joy sent Pearl a message to ask how best to start a budget, and what she needed to stick to it. Pearl replied with the method she had used most when she first started with budgeting. It was called the zero-based budget.
Pearl went on to explain, “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. Every expense needs to be listed as a line item in your budget.
You can get these line item costs by looking back at your past 3 x months’ bank statements. The total at the end of your budget, after all deductions, needs to be zero. 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.
If you have a positive value (extra money) left, then this money needs to go towards savings, or paying off debt.”
Pearl finished off by stating, “You should use whatever option (physical or digital) that feels most comfortable to you. I prefer using an Excel spreadsheet budget, and others are more comfortable using the traditional pen and paper method. Many banking apps also offer useful tools for tracking your spending.”
No matter which option you choose, always make sure your budget works, and that you are staying on top of your spending, so that you do not go over your allocated amounts.
Joy finally set up her first ever budget and wanted to find out the best ways to make her money stretch. She jumped onto YouTube to see what money saving tips she could find.
Here are some of the most important tips she chose to use:
Some of the other suggestions Joy found online were about what can be done if you don’t have enough money each month to cover all of your expenses.
Here are 5 of the best suggestions she found, and is going to try out this year to help cover those costs, and maybe even make a little bit extra!
1) Sell everything which you don’t use, and which is not important. Recommended places to sell include: Facebook Marketplace and Facebook community groups, Cash Crusaders, local second-hand stores, and Gumtree.
2) Have a no-spend month. During this one month’s shop your grocery cupboard’ and only go to free activities.
3) Consider student promotional and event work, as this can be done when you have the time available and need quick cash.
4) Get a waitressing or bartending job, even if this is just temporary, to increase your income. This would be more of a commitment, but can be good work experience as well.
5) Start a side-hustle such as a service-based side hustle, or using a talent or skill you already have (baking, plumbing, car washing etc.). Check out the CEO’s in Training Bootcamp on Educish for free steps on starting a side hustle!
Continue with your lesson to find out what happens with Joy…
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