At the beginning of each month, I dedicate thirty minutes to plan a budget.
Sometimes this process can be seen like you are a “money-oriented” or a greedy person, but that’s not true. Having a budget for the month gives me the “freedom” to spend money without feeling guilty.
Budgeting gives you the power to know in advance what are your fixed outflows and where you will spend your money.
I have to admit that in most cases I have unexpected situations that force me to spend extra money, or at least money that was not foreseen at the beginning of the month, for example, it could happen that in a month I need to attend to some birthday of a family or friend and I need to buy a present for him/her. This is not a problem, I just buy the present and withdraw the same amount from my piggy bank. As I said, is not a perfect process where you need to follow 100% of your fixed outflows and be strict, it’s just a process where you deliberately choose where to put your money.
This is how it works:
I make a list of all my inflows (salary) and outflows (mortgage, shopping, etc). Then when I find myself spending money and it belongs to a certain outflow category, I just add a new bill until the allocated budget for that certain outflow category is available.
With this process, I always know what I need to pay and what is still missing.
One of the main benefits I think this process has, is that when I spend money, I don’t feel bad or that sensation that you are losing something, instead I am happy to spend that money if it was planned.
I hope this can give you some input on how to manage your money or at least it can help you remove the belief that money is evil. It is not.