I’ve never had a ‘budget’ as such. Too many numbers and maths calculations for me! I run our household under some rigid rules, that oddly enough, gave me great flexibility to pivot financially if I needed to.
Fear not! I’m not going to give you a bullet point list of savings tips that you’ve read a hundred times before. Instead, I’m giving you the principle I followed to keep our financial house afloat:
Any dollar that you manage to put into a savings account, try and keep it there for as long as possible.
I love seeing my savings accounts go up. I loved it even more when I was a young Stay-At-Home Mum with 4 small boys depending on me. I’ve always worked on a fortnightly system and sometimes in those days the end of the fortnight and what was left of my money would go down to the wire.
But we never had money owing on a credit card and we didn’t borrow from friends and family.
Once I deposit money in the bank, I try to keep it there as long as I can.
That means cash flowing expenses as much as possible.
For example, Scout’s operation cost me just over 3K. I had the money in my 5K “pet fund” in my savings. I could have fronted up at the vet and paid cash. But I used my credit card. This bought me time to swing my wage into gear.
Unless I have a fortnight of crazy expenses, such as a 3K vet bill or a whole heap of bills coming in at once, I can count on having around 1K/fortnight of money that I don’t need to deploy on debt or living expenses. I have no debt.
By using the credit card and then putting my wage onto that card when I got paid, I cash flowed this wage’s ‘excess’ 1K straight off that bill. That leaves only 2K left to pay. I have another pay period before the due date of that credit card. Assuming nothing else goes wrong, I’ll have an extra 1K to throw straight at the bill then. That only leaves 1K to pull out of my savings.
I’ve protected my savings by leaving as much of them alone as I can.
Obviously, when I get paid after that I’ll repay my savings to get the ‘pet fund’ back to its original level.
Is this fun? Not particularly. I have a couple of projects that I’m itching to get started on and that money was supposed to go towards those.
But my overarching goal is security. So the top priority is to keep my savings intact. Whenever I empty a savings fund, I refill it before I do anything else.
I love seeing my savings accounts going up in value. But it’s almost as good just seeing them stay the same and not go backwards.
It’s hard for most people to be able to squirrel away money for a rainy day. So when you succeed – I think it’s wise to keep it there for as long as possible. Cash-flowing expenses from your wage is one way to protect your savings and keep making progress towards your goals.