Thursday, July 14, 2011

No shortcut!

As you are probably aware, there are no short cuts to getting money quickly! Well, there is the lottery but how many people win that! Instead of dreaming about having all the money in the world, we have to do our best with what we have got at the present time. This may involve a salary, pension, an allowance or even pocket money.

There are so many ways to deal with money and many, many people, websites and books out around on the topic. I have put together three ways to save money drawn from my personal experience in handling money in my every day life so far.

1. Stash the cash.
The term cash here is referring to the coins in your currency that you do not carry around or coins that are bulky and make your wallet heavy. In South Africa, we deal in Rands and Cents. We have 5, 10, 20, 50 cent coins, then a 1, 2 and 5 Rand coin. The first note is a R10 note. The coins are 'brown' up to and including the 50 cent piece and silver from there upwards. Cash (for me) is everything that is brown. What we do is put all the 'brown' money up to 20c in a piggy bank. These coins are just annoying and do not come in handy in everyday shopping etc. The 50c piece is quite useful though.
A practical example of how much money one can save but collecting 'brown money' is the following. A number of years ago we ran a youth group at the local church and ask the church to collect all the brown money. The response was amazing. We raised about R1 000 in the first year and more the following year! This was money no one wanted!
Try it and see how it goes!
The next thing we do with the cash is this: every so often we empty our wallet of all the 50c, R1 and R2 coins and put them in a box. We we know we need coins for parking or car guards etc then we go and take some out to use. 
We have done this quite regularly and one day we actually counted the money and found more than R50 in the box!
The best thing about this saving is that you do not miss the money!

2. Prepare a budget.
Before you start groaning about how boring or difficult it is to do, it does not have to take long at all! The benefits far outweigh the negative aspects.
This is a 3 step process:
i) take one months spending and analyse it.
I do this by getting it onto a spreadsheet on the computer and separating all the different items into columns. Include everything - I mean everything! At the end of the month total all the columns up and see where you have spent your money. 
ii) Sit down with family and discuss the results.
The trick here is to be honest about money. Involve everyone including kids. Discuss where the over spending occurs and where you can cut down.
iii) Based on the above point, prepare a revised budget for the next month.
Rearrange and tighten up the budget where necessary. Its a good idea to include savings in there too. Do this if possible. I would recommend saving for certain items for example car repairs and medical emergencies.

3. Use the budget as prepared
This is the tricky part, requiring the most work. The most encouraging fact about budgets is that they are never set in stone. You can spend a little more on something but you have to cut back on another as a result. This will account for the unexpected. An example would be a medical emergency or a car needing repairing.

Saving money is a priority and, if it is not happening, you need to do something about it. Fast! 
It does not have to be as hard as you think!

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