If you are looking for the secret on how to avoid running out of money, and how to make your money last longer, then you might be surprised that the answer is budgeting. Creating a budget is going to allow you to allocate all the money that you have coming into the home to a particular purpose, a job; only then will you know if you have enough money with which to cover all your expenses.
Money needs a job too
The best way of looking at a budget is giving the money that you have coming into the home each month, a purpose; put another way, treat your income as wages for certain jobs i.e. household expenditure. The same as you work for the money, the money now needs to repay that favour and work in return for you. If you are not allocating the jobs properly then you could find that you will run out of money before the next pay-cheque arrives.
So for each pound that comes into the home you need to tell it where its purpose lies, then you will be on the first step to creating the budget that is going to be working hard for you.
Before you can give the money a job, you need to know the jobs available, this is in the form of debts and regular payments that you need to pay, from your shopping to paying your rent or mortgage. Only when you are at this point will you be aware of the jobs that you need your income to do.
The next step is to allocate the jobs, making sure that every pound has a job, any leftover put to work in a savings account, ensuring that you have money working for those emergencies that always crop up.
No secret to budgeting
There is no secret to learn how to budget; you just need to be aware of the process. It is difficult to begin with, it is retraining how you use your money and if you are used to spending without creating a working budget then training yourself to have less money is difficult. It is going to take time and commitment from your whole family to help it succeed.
I know from personal experience when children want something and if you tell them you have no money their first response is to go to the cash machine. It is difficult for them to understand, but talking through this with them will help to pass on the message of budgeting and learning to look after their money too.
It is difficult for future generations to learn how to budget and to manage their money successfully if they aren’t shown the principles as they are growing up. Passing on the secret to making money last to future generations is important, helping them to learn the art of making and sticking to a budget is going to be the best gift that you can give. It is through example that our children learn. If they see you learning a new way to manage your money, they, too, might follow.