If you’re like most people, spending money is not a problem. There are, after all, plenty of ways to empty your wallet. No, the hard part is not the spending itself; It’s doing so wisely. So how do wise spenders make the most of their hard-earned cash? The answer is simple: First, they create a budget. Then, no matter what, they stick to that budget like glue.

1.Starting out

If you think creating a budget sounds painful, you’re right – in a way. It does require some belt-tightening. And you might dislike the limits you’re forced to set. But over time you’ll see that budgeting makes sense. A good budget not only helps your money last longer, it also leaves more to spend for the things you need most. If you budget your money well, you won’t run out before that next paycheck comes in. To begin, of course, you need a source of income. You could earn cash through a job, or maybe you have a small business . Whatever the case, the money must come from somewhere. The solution, for most, is fairly straightforward: work.

2.Write it down

With money coming in, the next step is to crunch the numbers. Grab a pencil and a calculator, and find your bottom line. After taxes, how much do you make each month? (For example let’s say, 300.000 Frw) From that, subtract whatever you need to save each month for big future expenses and the money you’ll need for any predictable recurring costs (example 140 000 Frw ), if any. The resulting number is the figure you have to work with (in this case, 160000 Frw). If the number is negative, you have two choices: Reduce your expenses or find a better job.

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Next, divide by four (160.000 frw/4 = 40000 Frw). This is your weekly budget. So what can you spend it on? That’s up to you, but here’s a word of advice: Prioritize. Budget first for the things you really need, and then for those things you really want. Write everything down in a journal, and keep it in a safe place. With your budget in ink, it’s a lot harder to ignore.

3.Track your spending

As each week progresses, keep track of your spending. Record each item you bought and how much it cost. If you need to, make adjustments to your figures as you near the end of the week. If Saturday comes around and you’ve already spent every last dime you allowed yourself, you’d better think twice about your plans. Whatever you do, don’t exceed your weekly or monthly limits. After your first full month of expense recording, add everything up and see where you stand. If there’s money left over, you can treat yourself to something special. Or better yet, you can add it to your savings.

4.Sticking it out

Ultimately, good budgeters follow several rules: First, they’re realistic about their means. They know what they have to spend, and they stay within their bounds. Second, they’re meticulous record keepers. Everything, no matter how cheap or expensive it is, is committed to paper.  Finally, and perhaps most important, they’re good decision makers. They understand the value of financial responsibility, and they’re never afraid to admit that, quite often anyway, the best things in life are free.

Jacques M.

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