I used to be at the frugal end of the equation. It would kill me to spend more than $3 on a bottle of shampoo and I very rarely bought anything unnecessary for myself. Lately my income has went up substantially and since I’ve moved to a small farm I’ve been wanting to work on one project after another. Those projects = lots of spending.
Clearly, striking a financial balance can be hard!
Strategies to Strike Financial Balance
Here are the strategies I’ve used to make sure I stay in balance the majority of the time.
Budget Spending Money
One thing I used to do was budget spending money. When I had to work with a much tighter budget that money was closely monitored.
I’d give myself $20-$30 per week to work with which could be spent on absolutely anything. More often than not that money went to lunches at work.
Meet Your Goals First
The system I’ve used over the past year or so is to meet all of my financial goals first and then allow myself to work with the leftover cash. I’ve come to learn that this only creates a good balance if I increase my financial goals as my income increases. If not I end up spending way more money on the “fun” stuff in comparison to what’s being put toward important financial goals like mortgage payoff, retirement and savings.
Plan and Save for Big Purchases
A lot of the projects I want to work on now will take time to save up for. Unless I’m willing to go into debt (which I’m not) they require patience.
To save for these things I have certain income streams automatically put into a savings account. That money is project money for my husband and me to split and do with as we please, guilt free.
When In Doubt Lean to the Savings Side
When I’m doubt and feel like I may be spending too much money I lean toward savings side. At the end of the day I’d rather be safe than sorry. I might regret spending money on a project but I know I won’t regret saving and giving myself more time to develop a well thought out spending plan.
How do you strike financial balance?