The following is a guest post by blogger Richard Adams from Debt Assistance Guru.
Many readers of this blog will be familiar with the idea of living on a budget. Whether the aim of that budget is to save up for a big purchase, to enable you to pay off debt or simply to ensure you live within your means budgets simply make sense.
But there's also a potential problem here; living on a budget means self control. It may involve careful planning, not purchasing things you really want or working hard all month only to send off a chunk of your earnings to a credit card company or loan provider rather than treating yourself to a few of lifes luxuries.
In short, while living on a budget makes sense it can also be kind of tough. And the tighter your budget, the less fun it can be. Living on a budget can feel like you're running a marathon - just tripping along one step at a time, not really having much fun along the way but just waiting for that feeling of satisfaction and achievement when you finally cross that finish-line.
Considering this realization recently my mind started to wander about ways in which we can both live on a realistic budget that will help you to achieve your financial goals whilst not feeling like you're denying yourself some of the pleasures in life enjoyed by your friends and family. Where being on a budget is actually fine - and where you're able to live a full and enjoyable life while still putting money aside for the things that really matter.
The more I thought about it the more the word "abundance" and "riches" kept coming up. And while living on a budget can superficially seem at odds with these words, money is only one way to measure these factors. A life full of riches doesn't have to mean Tiffany jewellery and private jets. It can just as easily mean a well-rounded life full of purpose, of pleasure, of satisfaction and of fun.
And these things don't need to cost the earth - indeed many are so cheap or free that they can easily be slotted into life on a budget meaning a more enjoyable lifestyle while still meeting all your financial obligations.
Decide What's Really Important To You
What we think we want and what we really want aren't necessarily the same thing. Many of us spend time and money on things that really aren't bringing us too much pleasure.
Consider your expensive TV subscription. Do you love the shows you watch? Do you relish getting home at the end of the day so you can dive into the latest episode of your favorite TV show? Or do you have it simply because it's there and you haven't got around to reducing (or cancelling) your package?
Is that new pair of shoes you saw in the mall really going to make you that much happier or in all honesty do you really already have more shoes than you can wear?
What about spending quality time with your kids or friends? Do you do enough of this really or do you have to fit them around the rest of your life? Are you "in the moment" when you're with them or are you thinking about that presentation you have to give at work tomorrow?
The first key step is taking the time to be honest with yourself about what "riches" really mean to you. What excites you? What makes the time fly by when you're doing it? What really gives you a warm glow inside when you do it?
Often these aren't things like buying a new car or getting the latest cell phone but instead are more based on relationships, personal growth and achievement.
Remove Unimportant Items
Part of the art of simplicity is having the strength to get rid of those elements of your life that don't really stack up. Those elements which you realize don't make you happier, which take you in the wrong direction to that of your goals or that make your life more stressful, expensive or complicated than it needs to be.
Removing these things from your life means not only more time but also more money to spend on the things that really matter to you.
To give you a few personal examples I managed to reduce my cell phone bill by 80%, stopped buying takeaway food and opted to cook at home more often instead, took a brown bag lunch to work rather than wasting money on premade sandwiches and managed to arrange a pay rise at work which meant I could actually work half a day less each week yet earned slightly more than before.
Love Your Job
Many of us work 40 or even 50 hours a week and this means you will likely spend more time with your work colleagues than you will with your family. You'll spend more time at work each day than you will spend doing anything else so for a truly joyful life while living on a budget you need to enjoy your work.
If you hate your job, look around at other options. This doesn't have to mean anything as complicated as changing your whole career and retraining to do something else (that might have to wait till finances allow) but can be as simple as transferring to another department or branch where you get on better with your colleagues.
Treat Yourself Without Guilt
If you've managed to save money through an intelligent process of elimination then you should have some extra cash available each month - no matter how little. Assuming you're still able to meet your financial objectives without this extra cash, why not take the time to consciously treat yourself from time to time - and do it without guilt?
Take your partner out for a romantic meal. Go to the salon. Go away for the weekend. Do something that you'll be remembering for months to come. Make it special and remember that it doesn't have to be expensive. For example a weekend away doesn't have to involve foreign flights and expensive hotels. It could simply involve staying with friends you haven't seen for some time to save your budget and just spending a little money on entertainment.
Use Reward Cards
Many companies are operating in a cut-throat market and so constantly try to introduce "loyalty programs" to keep us coming back for more. Used intelligently you can participate in these programs while going about your everyday life and then earn rewards as a result.
One friend of mine just took a week off work to spend with his children. He took them to all manner of theme parks, zoos and other attractions. When I asked him how much all that cost he smiled and told me that he gets points every time he does his weekly grocery shopping at the local supermarket and cashed them all in for vouchers to pay for the entry to all those attractions. His total expenses were a bit of gas to drive the kids around. Besides that he spent nothing more than a normal week yet had the time of his life.
Join A Local Club
Look around you and you'll likely find dozens of local clubs. From slimming clubs to art classes, from book clubs to those teaching you how to research your family tree or fix your own car.
In my experience these local clubs - run by local people - have numerous benefits. They offer you a change of scenery and an opportunity to make new friends. They encourage you to learn a new skill and best of all they can be very cheap indeed.
The judo club I went to recently cost me less than $10 for the evening and helped me to get a good workout but I also had the time of my life - in stark contrast to just sitting infront of the TV all evening.
Invest In Your Relationships
We humans are social beings and possibly more than any other factor in our lives having positive, constructive personal relationships is the most important.
But being honest here - how much quality time do you spend each week with your friends and family? Do you have any friends and family members you haven't seen (or even spoken to) in months - or even longer?
From reconnecting with old friends through Friends Reunited or Facebook to surprising your partner with breakfast in bed to helping a work colleague move house it is these relationships which will bring you real "riches" - without you having to spend a fortune.
Do Something For Those Less Fortunate Than Yourself
Volunteering has two main benefits. Firstly you get to help out those less fortunate than yourself but an added bonus is that it can make you feel great. And at little or no cost.
Most of us have things we're passionate about whether that's the environment, children, animal welfare or whatever. Volunteering - no matter how little time you can spare - is an opportunity to really contribute to something you care passionately about and also to meet other like-minded individuals who, by default, you will probably have a lot in common with.
Lastly volunteering can open up all manner of possibilities for the future. There are numerous people I have spoken to that have turned a part time volunteering position into a full-time career doing something they love. When you invest your time into something like this the returns - and not just in terms of personal satisfaction - can be amazing.
Me Time
How much time do you get to yourself to just "be"? If you're like most people the answer is probably "not a lot". And yet sometimes taking time alone - to gather your thoughts, take a walk, soak yourself on a hot bubblebath or just relax with a good book - can be just what the doctor ordered. Time without responsibilities or to-do lists. Without pressure or stress. Time away from the "real world" where you can unwind, relax and be yourself.
Of course this costs nothing - apart from the conscious effort to create (and "block off") this time so that you can focus purely on yourself for a short while. You work hard. You deserve it. Now make it happen.
All of these different elements can combine to create a rich and enjoyable life without it costing you the earth. And the easier it is to live on your budget - the more enjoyable life is - the more successful you will be sticking to it and achieving your financial goals whilst still having the time of your life. Why not consider some of these options today and I would also like to encourage you to leave us a comment below telling us about ways you have made living on a budget a more enjoyable experience.
I believe that this younger writer's perspective has underestimated the great importance of relationships to the human psyche, especially as you grow older.
As a 76 year old male, married for 54 years, and retired for 18, the richness of my life is far more the result of the relationship I have with my significant other (in this case my wife) than it ever is from friends and family or anything else I can think of. Even from the day our first child was born we put our own relationship ahead of all others, because if our relationship failed we realized the whole family would suffer greatly.
Later on in life when you are retired and don't go off to work every day and mix with large numbers of co-workers, and also when your children are grown up, have moved away, and have families of their own, the importance of your significant other becomes the most enriching factor in your life and the sympathetic ear always ready to listen to whatever's troubling you.
Life changes dramatically as you move from one phase to the next.
We no longer use a budget - it's very simple - if we "Need" something we buy it, however at this age we don't need nearly as much as we used to because the very large expenses are mostly behind us and we no longer feel the need to try to keep up with the Joneses and the constant changes brought about by all the Hi-Tech innovations and new gadgets.
I can identify with the topic of "Removing items". It's good to simplify one's life, get rid of the clutter, get rid of social engagements that you no longer enjoy. Become more hedonistic, don't just do things because others expect it or because you feel trapped in committments that are no longer enjoyable. It's important to restructure your life as you pass from one phase to the next. It's also important to simplify your investments as you move into old age. Consolidate them all at one institution, get rid of your losers and lower your risks as your portfolio grows. The most important things in life eventually become happiness and contentment.
As a wise old professor once told our group of trekkers one evening when were sitting around in the mess tent after dinner, high up in the Annapurna range in Nepal - The two most important things in life are 'To Love Someone' and 'To Be Loved by that Someone'.
Posted by: Old Limey | September 30, 2010 at 10:51 AM
I currently have $120K of graduate student loan debt I'm trying to pay off. I created a budget that analyzes my monthly cash flows. The budget builds up the expense categories from the ground up. E.g to calculate dining expense, I calculate the avg. cost per meal times the number of times I go out to eat. My budget is a 10 year model, so it's really interesting to see that small cuts each month really add up over time. Let's say you eat out once a day and you decide to substitute diet coke (cost $2.00) for water. Over a 5 year period you'll end up saving a total of 3,650, not taking into account the effects of compound interest, which would make the savings more.
Posted by: pragmatist | September 30, 2010 at 12:11 PM
I currently have $120K of graduate student loan debt I'm trying to pay off. I created a budget that analyzes my monthly cash flows. The budget builds up the expense categories from the ground up. E.g to calculate dining expense, I calculate the avg. cost per meal times the number of times I go out to eat. My budget is a 10 year model, so it's really interesting to see that small cuts each month really add up over time. Let's say you eat out once a day and you decide to substitute diet coke (cost $2.00) for water. Over a 5 year period you'll end up saving a total of 3,650, not taking into account the effects of compound interest, which would make the savings more.
Posted by: pragmatist | September 30, 2010 at 12:13 PM
New shoes? No one needs new shoes and seriously, people need to understand that material goods do not give us ultimate happiness. Temporary? Maybe.
Unfortunately, we now live in a society that loves things and uses people when it used to be a society that used things and loved people. : (
Posted by: Brian H. | September 30, 2010 at 12:30 PM