An inspiring budget? Is there such a thing? Yes, if you create a budget as a means to achieve your dreams and goals.
We all have dreams, things we want to do, experience and achieve in life. What are your dreams and goals? Once you have a few in mind, ask yourself, do you need money to experience them? Likely you do.
So, to achieve those dreams, you must start budgeting for them. If you create a budget to afford a trip of a lifetime, buy a house, or start a new career, then budgeting becomes less tedious. Add creative ways to make money and innovative ways to save money, things that you can do that are fun and enhance your life, and you are well on your way to being inspired by your budget.
A budget is the first step to creating wealth because a budget tells your money where to go instead of you wondering where it went. It puts you in control.
Here are 5 Tips to Creating an Inspiring Budget
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1) Pay Yourself First
One of the fundamental principles of personal finance is to “pay yourself first.” Pay yourself first means automatically routing a specified percentage of your paycheck when it is received to an investment account. Ideally, You take 10% off the top before paying for anything else. Depending on your tax bracket, you put that 10% in a retirement or Tax-free savings account. Don’t worry about what you will invest in for now. Just get it out of your hands, so you won’t be tempted to use it for everyday living. When you pay yourself first, you are prioritizing your long-term financial well-being. The more money you put aside with every paycheck and invest it wisely, the earlier you can become financially independent.
Do it early, ideally with your first paycheck. The earlier you start, the longer you expose your money to the magic of compounding.
If you put $300 away every month and begin at 25, you would have $720,000 by age 65, assuming your average return on investment per year is conservatively 7%. But if you started at 45 and put that same $300/month, you would only have $150,000 by age 65.
2) Find Creative Ways to Increase your Income
A budget is simply a list of income streams and expenses. The only rule is that your expenses must be less than your income. So to put more money aside for your dreams, you have two levers you can adjust. Increase your income and/or reduce your expenses. Hopefully, you can do both. But to be inspired by your budget, you must do this creatively. Do it in a healthy way, in a way that enhances your life. You can even do it without working more.
Here are five creative ways to increase income.
Travel
If you work from home, you have hit the honey pot for creative income ideas. As long as you have internet, you are mobile. You can rent your place and look online for people looking for housesitters to mind their pets. There are now international housesitter sites you can become a member of, such as housesitterscanada.com and housesittersamerica.com. You discover a new neighbourhood or another part of your country and make extra income.
Do what you Love
Maybe your day job pays the bills, but your secret passion is playing the guitar. You trained in it but took your day job to cover your expenses. It’s time to get back to your passion. Advertise guitar lessons weekly or take your friend’s bet and bus at the train station. Get back to your passion, whether it is your guitar, cooking, gardening, or walking someone else’s pet. Enrich your life while creating more income.
Share your Stuff
Do you have a car you rarely use or an empty condo while on holiday? Get on ABNB, Hyrecar or Turo and create income by sharing your stuff. You love to drive and chat with strangers. Why not sign up for Lyft or Uber? Do you love to bike but don’t have the time? Why not sign up for Skip the Dishes? Share your stuff and make it a win-win.
Freelance
If you have specific skills, especially in the tech industry, such as graphic or app design, web development, photography or videography, there are many freelance opportunities to pursue. But if you already feel burnt out working daily with these skills, choose another option to create extra income. Keep it healthy and find your balance.
Help
If you live in an area where you know your neighbours, there is nothing more rewarding than helping out an elderly neighbour or an exhausted parent. If you sit at your desk all day, why not offer to help with some physical work? It’s not a significant income stream, but it provides exercise, compassion and empathy.
Be creative in increasing your income stream. Make it a healthy choice by focusing on enhancing and enriching your life vs focusing on what will pay you the most.
3) Add a Dream Item to your Expenses
The inspiring part of your budget is you decide where your money goes, how much you will spend on various necessities and how much you are willing to sacrifice to reach your dreams and goals. What is the dream item you want to add to your budget? Is it travel, tickets to the World Cup, or a spa getaway once a month? If you have more than one and can’t make a decision, let health be your guide and choose the most healthy for you.
Travel is incredibly healthy, especially if done sustainably. Exposing yourself to other cultures and challenging yourself outside your comfort zone creates confidence, expands your horizons, and those new experiences are an excellent workout for your neuroplastic brain.
My dream item is travel. I put it at the bottom of my expenses so I can fiddle with all the other costs above and see how I can realistically reduce them to maximize the amount I put aside for travel.
Once you have chosen your dream item, write it down as one of your expenses.
4) Find Creative Ways to Save Money
Once you have written down your dream item, say tickets to the World Cup, imagine yourself being there. Imagine travelling there with your peeps, the energy of the crowds..
Now think about what you are willing to sacrifice to get there.
Are you willing to share your space by offering it for a short-term rental or getting a roommate? Are you ready to walk that extra distance to save money at the bulk food store vs the convenience of the corner store? What about second-hand clothes and household items? Do you need to spend your money for another TGIF at the pub, or can you grab some beers and head to the beach, the park or somewhere else that is free? What about growing your herbs and microgreens or harvesting wild berries and fruits to freeze for smoothies?
Look at each expense on your budget and how you can creatively reduce your spending on it. The more you save on these items, the more you can put into your dream item. Your life, your budget, your choices. Use this opportunity to live a creative life.
5) Reconcile Monthly and Adjust
Budgeting is not a one-and-done thing. It is a maintenance thing. At the end of every month, you review your income and expenses and compare them to your budget. Like most of us, you will be surprised how much over budget you are on various costs. Don’t be disheartened. You are bringing awareness to your spending habits. This awareness is your first step to financial success. Just review these categories, and make adjustments.
Budgeting is one of the most important financial habits you can adopt. It is the first step towards financial health. It brings awareness to your spending habits and puts you in control of where your money goes instead of wondering where it went. Explore creative ways to increase your income and reduce your expenses. Your budget can inspire you towards a life lived intentionally, creatively and out of the box.
Below are some basic budget apps and templates to build the foundation of your budget, then use these tips to make it inspiring.
