04 April 2018

How We Live Happily on Our Budget

I'd love to say it is easy and we live on our budget without even thinking about it, but that simply wouldn't be true.

We are human. There are times we want things RIGHT NOW PLEASE that we just don't have the cash saved up for, and I'll admit that I don't like it. Sometimes I suffer from the "I see it, I want it, I deserve it" mindset too.

But our lifestyle is what it is. We live debt free. We have everything we need, and as of today, want. We have worked hard to get to this point in our lives, and we do not ever want to be where we were When Disaster Struck, so we have a few checks before we go crazy with the spending.

Now we don’t stand in the store and tick them off, but they are always asked before we spend money that's not on our spending plan.

1. Is it a want or a need? – Sometimes, in the emotion of the moment, the difference between wants and needs blurs, but they are two very different things.

2. Can I find it used? – There are very few things we buy that are not used.  Underwear, shoes and tyres are the three things I absolutely won't buy used, otherwise as long as the item is in excellent condition and a fair price, used suits us just fine.  If something can't be sourced secondhand, then we do our research and look for the lowest possible price, and aim to never buy anything that isn't on sale (other than the basic grocery items from Aldi that we stock our pantry with).

3. Am I buying this out of habit? – We get so used to shopping that tossing things in the trolley or basket out of habit can really bust that budget. Shop with a list for everything, not just groceries. I have household and garden items on my shopping list, clothing, medicines - everything we need to buy. I'm so focused on getting what's on the list and crossing it off, I very rarely ever add anything to the trolley.

4. Will I be able to use the item for more than one task?  – How many times have you found something in your cupboard and realised you've only used it once or twice, or even worse, not at all? Or you can't remember why you bought it in the first place? Think about every purchase, and ask yourself:
• will you actually use it,
• will you be able to use it more than once,
• can it be used for other purposes,
• do you have the cash to pay for it ,
• will you still be using it in six months?

5. Is it worth going in debt? – Unless you're buying a house, then the answer is always no! When it comes to anything else (including cars!), if you don't have the cash to pay for it, then you can't afford it. Simple.

Working out your budget to fit your income may mean you need to trim a few things, but it's a much nicer lifestyle to trim a few things from the budget and be debt free, than to buy whatever you want and live with the ongoing stress of debt.

And if asking those questions is too daunting for you, remember the $100/24 Hour Rule:

If it's more than $100, wait 24 hours before buying it. Then, if you still need it or really want it, think about how you can afford to get it. Do you have the cash on hand? Will you need to borrow from the budget? Will you have to go into debt to buy it (credit cards, store loans etc.)? Can you raise the money to buy it (overtime, garage sale, use birthday money etc.)?

Most of the time you've changed your mind, realized you don't really even like it or just plain can't be bothered going back to the shop to get it and you've just saved yourself a couple years' worth of debt re-payments!

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