Five budgeting tips we learned from Clever Girl Finance
Finally facing up to your finances can feel scary, but setting yourself a realistic budget is the best way to achieve security and financial wellness – here’s how to do it
Budgeting. It’s something we all know we need to do, but it so often gets shelved in favour of more exciting diversions. That is until we slide into our overdrafts and the promises to do better start all over again.
If you need some motivation to sort out your financial wellness, we’d highly recommend checking out Clever Girl Finance, which – despite the name – has great tips for all genders on how to better plan your finances.
Clever Girl Finance is the brainchild of award-winning certified financial education instructor Bola Sokunbi, whose passion is to help people take control of their finances. She has published a series of books on this subject, hosts a podcast called The Clever Girls Know and also offers free training courses online at cevergirlfinance.com, including one titled Create a Budget That Works.Â
Here’s five budgeting tips we’ve learned by tuning into Clever Girl Finances.
- Step out of fantasy land
Budgeting is all about being realistic; planning out what you can spend and save versus what you earn. Often, we can slip into financial fantasy mode by setting unrealistic goals that don’t match our pay packet, dreaming of a lottery win rather than putting in the time and effort to sort out our finances, or piling up debts that we imagine one day we will magically be able to clear with no real plan on how to do so. The biggest fantasy? Saying you are budgeting without having written out an actual plan. Stop dreaming, start forecasting.Â
2. Really look at the data
The first step to creating a solid budget for your finances is to take a long, hard look at your personal financial landscape. It is much easier to bury your head in the sand in the moment, but this won’t help improve your situation and could lead to long-term stress. Take a short, sharp hit instead and look at where you are now and make a list of all your assets and income. Then, track your spending for a few months so you get a realistic idea of where your cash is going. Next, think about where you want to be and ways to get there based on the data you’ve gathered. Once you’ve done this, you’re on your way to creating a realistic budget.Â
3. Keep yourself motivated with mid-term goals
So often when we are budgeting, our financial planning can be split into short-term goals, such as putting aside enough money to cover your rent, and long-term goals, like saving for your pension. Sokunbi advises setting yourself some mid-way goals that should take no longer than a decade to achieve. These will keep you motivated and committed to your long-term goals as you can enjoy successes along the way. One idea for a mid-term financial goal could be saving for the deposit for a property.
4. Find fun in the frugal
Frugality sounds a lot like austerity, and for many it isn’t appealing, but for those on a budget, being frugal can be the difference between hitting your financial goals early or not at all. The trick is to choose where to be frugal, and start with areas in which you might enjoy the challenge of finding ways to save money. Food waste is a great place to start, as planning out your weekly shop down to the exact gram will not only improve your bank balance but keep your fridge clean and lessen your impact on the environment. It might also encourage you to cook in batches and freeze portions, or to make more packed lunches – both of which will also reduce your expenditure.
5. Budget for a rainy day
Even the best budgets can be knocked off their trajectory by everyday life events, such as a broken washing machine, an unexpected house move, the breakdown of a relationship or a career break. This is why every budget should have flex. Set aside a small amount of money each month that can go into an emergency fund and don’t touch it unless you really need to. This way, if you are hit with an unforeseen expense or your life changes suddenly, you have a safety net to fall back on.Â
