We all have different goals in life, but I’ll take a wild guess and say financial independence is at the top of the list, or at least the top 5. We’d all love to be good with money, you know, the kind of people that have their s*** together. But if, like me, you have tried and failed numerous times to create and stick to old school budgets then you’ve come to the right place.
The word ‘budget’ is possibly the ugliest word in the English Language. Budgets (yuck) can be super restrictive and difficult to stick with, nobody needs that kind of negativity in their life. But everybody needs a Conscious Spending Plan. A CSP allows you to save more money so you can spend it on the things that really matter…like the ‘Deluxe Caramel Snickerdoodle Macchiato’ on the Starbucks secret menu (so worth it!).
What is a Conscious Spending Plan?
A CSP basically gives you the choice of when to skimp and when to splurge. A budget demands that you pay everyone else (bills, tax, car finance) first then try to live on whatever is left, if there’s anything left at all. A Conscious Spending Plan allows you to pay yourself first and leave the leftovers to the rest. Don’t get me wrong, its still a plan that maps out how to build your savings AND pay your expenses, but the difference is, it gives you more CHOICE. It’s up to you to decide what’s important and what’s not.
Let’s break it down.
The Budget: It’s a shame that beautiful faux fur handbag is not on your budget, it would go so well with the leopard print boots in your wardrobe. Oh screw the budget! You work so hard for your money and should be able to treat yourself any way you want. That handbag is going home with you today, even if it means there’s no money left to save for the electricity bill due in two weeks. You only live once!
The Conscious Spending Plan: That beautiful faux fur handbag would go so well with the leopard print boots that you never wear (because you don’t have a matching bag to pair them with!). To make up for the sudden expense, you can skip going out this weekend and watch telly at home instead. Besides, you’ve already put some money in your savings account and contributed to your pension. You have paid yourself first, this is just the extra guilt free-spending money left! 🙂
It’s not an impulse buy, you’ve made a considered decision and gotten value for your money. The Conscious Spending Plan allows you to splurge on what is important to YOU and skimp on the things that don’t matter. Cut costs on the things you don’t care about and spend extravagantly on the things you care about. To get started, all you have to do is ask yourself this question:
WHAT’S IMPORTANT TO YOU AND WHAT’S NOT?
If you want to get your money in order with minimum hassle, but don’t really know where to start, visit Ramit Sethi’s blog for step by step tutorials on how to manage your finances.