This is the third post in my Creating a Balanced Life series – and focuses on Income – Money – anything financial really.
In the quest for a balanced life there is one thing that is the foundation that helps us to live. Its one of the basic necessities, but also one that can provide luxuries if we learn to manage it well – and thats money.
I have chosen the term INCOME to fit my S.M.I.L.E. acronym (Social – Manage the Home – Income – Leisure – Energy), and feel that this works well, as any money coming into the house is income that you can choose what to do with.
Whether you are scraping by each month, or able to save and afford a few treats, there is a need to manage your income so that you get the most out of it. Once you stop having to worry about money, you can spend your time doing other things instead.
But you need to always be aware of what you have, what you need, and what your future holds (as much as we can of course!), and budgeting and planning are key to making your money work for you.
What money do you have?
We need to look at what you have – so start by writing down anything you have in the following areas:-
- Large saleable items (house, jewellery etc….)
Now you can be more aware of what you have – and see the clearer picture.
What do you need?
Creating a budget is key to being able to rest assured you can afford things each month. I am in the process of writing a budget sheet for my Home File documents (soon to be one sale – watch this space!) which you can use as a template for your own budget, but for now simply writing down everything you currently need to spend each month is enough to give a rough idea of where you are heading.
Write down anything like the following:-
- Mortgage / Rent
- Council Tax
- Gas / Electric
- TV license
- Cable TV
- Mobile Phone
- Home Insurance
- Car Insurance
- Car Service / Tax / MOT
- Socialising / Going out
- Gym / Hobbies
- Savings (I put here as a necessity as everyone should have savings if possible – for any unexpected emergencies – again this will help to alleviate stress on a day to day level)
Now hopefully if you take the total of your outgoings away from your incomings, there should be a positive number left. This can then be saved or spent as you see fit.
What may you need in the future?
You may have already written down or thought about your future as part of getting more organised, and you may have some big ticket items in your ideal life that you need to be prepared for in a financial way.
Things like moving house, having a family, starting a business – all need large injections of cash at specific points in life, and if you prepare for them as much as you can, then taking that step will be easy when the time is right – its one less thing you will need to worry about.
When I started to plan setting up my business, I was currently employed in a good job and there were opportunities there to do overtime etc… and save as much as possible.When we also moved 3.5hrs away this job was no longer an option, and so I started to use my skills to contract for a year. In this time I managed to earn more than in my previous job, and was therefore able to save enough to ensure I could pay the bills for a year without worrying. Had we not moved as well and had i not had my hand forced to look for different employment, i may not have saved as much and would have had more to worry about when I finally decided the time was right to go it alone.
Its not rocket science that if you are spending above your means you are going to get into trouble fast. What if the worst happens and you fall ill / lose your job etc…?
Ensuring your income is safe for as long as possible is paramount to getting organised.
If you have savings, try and keep at least 6 months of your income to one side, so that you have some breathing space should you need it. In todays world no job is secure, and no-one knows whats going to happen, so best to be prepared.
Maximise your incoming money
Another great way of creating a safer and easier life for yourself is to maximise what incomings you currently have, and to create more if possible.
There are lots of ways to do this and here are a few ideas for you to think about:-
Maximise what you currently have
- Can you reduce your bills at all? There are great deals to be had on most things at the moment if you can spend a few hours shopping around, and it could save you loads over the years.
- Do you really need everything you spend on? Can you get rid of your landline if you only ever use your mobile? What about reducing food costs by planning meals and possibly even changing where you shop. Can you stop any subscriptions/memberships? All of these are quite easy wins, and won’t change your lifestyle that dramatically, but all add up quickly to big savings.
- Are you spending a lot on childcare at present? Maybe its possible to get a couple of friends together and share childcare each week so that each of you are making savings, your children have others to play with, and its a safe environment. This works really well if you work part time and need after school or before school care.
- Do you have skills that you could swap with others so you save money on things you can’t do yourself? i.e. can you babysit for a friend if their son washes your car once a week etc….
- What about giving up your car and walking/cycling instead? You could get fit into the bargain! If things are too far away theres always buses or trains which will still work out much cheaper.
- What do you have in your cupboards? A great test is to see how long you can go for without having to spend on food and toiletries etc… – most of us have far to much in the freezer and pantry, and bathroom cupboards – and this may just save you a months shopping bill each year – definately worth giving it a go (I find myself throwing out things from the freezer sporadically as they have been long forgotten – what a waste! – note to self must get freezer checklist written!)
Create new income streams
- Can you get a raise, promotion or overtime in your current job?
- Can you find a similar job that pays more elsewhere?
- Can you do anything to earn extra money? Dog walking, cleaning, childcare etc… can all quite easily be fit around other commitments – Even something like ironing for a couple of extra families could bring in around £50 a week, and no its not everyone’s idea of fun, but if you can fit it around your schedule and its making a difference then why not! – you may otherwise just be sitting watching TV so its not a stretch to iron while watching it really! Think outside the box and you may surprise yourself.
- What about starting up a business? When I set up my interior design business I lost count of the number of people who said they would love to do something other than the job they were in. Whats stopping them?! I retrained, and yes its hard work, but its SO worth it – you end up doing something you love, making money, and are able to work as much or as little as you need to at any given time (mine works really well around having children for example)
- Do you have things around your home that you don’t need any more that could be sold? EBay is great for this! or a car boot sale.
- Many people fund changes in their lives by juggling the possibilities a little. Selling your home and renting or downsizing may free up what is needed for example (you have made a note in the first section of the larger items that could be drawn on if required – its good to know what you have as you never know when you may need it)
To feel less stressed about money, you need to take stock of your situation – however good or bad it may be. Be honest with yourself about where you stand money-wise, and then make steps to improve it.
There are ways to make money if you need to, and ways to maximise what you currently have available – and thinking outside the box may well be eye opening!
I have added income to this series of posts, as once you have income under control, and keep it in check daily, then you can free yourself up to do all the other things you want to do with your time and energy.
Heres to a happier, more balanced you!
Want to move onto the 4th part of this series? Click HERE to go to the post all about sorting your Leisure time…