For the Last three years of my working life I have been working with members of the community, helping them sort out their finances and more importantly helping them to create and stick to realistic workable budgets.
This has been very enjoyable and rewarding and I have learnt many things in this time, such as, the banks are bastards, payday lenders are worse and that there is no such thing as a quick fix (winning the lottery is probably one but at odds of 1 in 45 million I think I'll leave it out).
But there is one massive secret that keeps coming up in every budget I create with my clients and I want to share with you, dear reader.
Are you ready, please sit down while I drop this prime piece of knowledge on you, here it is:
DON'T SPEND MORE THAN YOU EARN!
BOOM!
Yeah, I know what you're thinking, thank you Captain Obvious, thanks for nothing Jason, I already knew that. But lets look a little deeper because in my experience everyone knows it but not many follow it.
In most circumstances the reason to budget comes down to two basic wants, "I want to save" and/or "I want to pay off my debt." Now, dear reader, what is the best way to achieve these things? that's right, You must generate excess funds, which is another way of saying, don't spend more than you earn.
Now, I don't care what you spend your money on, whether you spend $400 a weekend on drinks and girls, or $500 a week on shoes and handbags (forgive my stereotyping here) just, for God's sake, only spend your money. No Credit Cards or loans.
Stop trying to keep up with the Jones' do they earn about similar to you and yet you cant understand all their new stuff, holidays and private school education. Then call "bullsh*%" on them as I promise they are living off of borrowed money and will be stretched more than Kim Kardashian's Yoga Pants should their income decline by just a little or interest rates increase.
Of course its a little more complicated than that and sometimes not spending more than you earn means going without some things. But for some short term "pain" you will get long term "gain" and live a life with little or no financial stress.
We have strategies and systems to coach you into not spending more than you earn so give us a yell at www.prudentcashflow.com.au