Save or splurge?

It is known, we must save for the future. Your parents, your friends, your teachers…everyone tells you so. But we agree that this drivel, we've had enough.

Yes, it is necessary to save and you are aware of it. But in 2023, saving is increasingly difficult, especially if you want to have a life. 

So, the killer question: How can you plan a budget for your future, but also to live while life is worth living?

You have to save your money, that's a fact. But when is it necessary to spend for you?

Money isn't just for saving, it's also for improving your life. Sometimes it's worth spending to bring yourself a little happiness. The important thing is not to fall into credit debt.

Or spend?

Health

One of the areas where the expense is not to be neglected is your health. Do you like to train and want to treat yourself with a high-end gym membership? Do it!

If you prefer to enroll in specific sports classes, but which are a little expensive, do not hesitate. Your health first!

The same goes with the quality and freshness of your food, there is sure to be a huge return on investment in this expense. 

Don't forget: your sanity. Prioritize it. Regardless of the costs, it is worth investing in your well-being.

Assurances

We don't tend to prioritize insurance in our budget. Yet they are so important.

Insurance is not only useful to protect your property (house, car), but also for your person or your family.

Health and disability insurance is a necessary investment for your financial security and peace of mind. Investing in a good health insurance plan is necessary.

In addition to health insurance, life insurance is a great investment (yes, even during your lifetime). 

Life insurance not only provides peace of mind to your loved ones upon your death, but it can also be a great tool to diversify your investments. If you want to know more about how to invest your money with life insurance, click here.

Happiness and comfort

Sometimes you have to indulge a little.

It's also good for our mental health to splurge (smart). You can definitely splurge without straying from your financial goals.

Do you like your Starbucks coffee every morning? Does it help you enjoy your days? So there is no reason to stop buying it and thus make yourself miserable.

Without exaggerating, the things that bring you happiness are - in my mind - a worthwhile investment.

In the same vein, items or services that are likely to lighten the mental load or improve your comfort are worth it. If the worst heavy chore for you is washing your windows…delegate! The amount is worth it if delegating this task improves your comfort.

Buy the things you saved for

Have you been saving for your dream trip to Asia for 3 years? It's definitely not a frivolous expense.

Having the logic to save for more expensive follies is already being smart with your money.

If you dream of owning your first designer handbag and have been saving for it for a few months or a year - treat yourself! It's time. 

The principle remains the same with follies which can be large investments such as a house or a small business.

How to plan this budget?

Now that you know what to spend on, you need to know how to plan your expenses.

It's easy to mismanage your cash flow and end up running out of money for your basic needs (rent, electricity, food, hygiene products, etc.)

Know how much money you have

First, you need to know how much money you receive per month. To find out, just look at your pay slip. On it, you see your gross salary (before deductions) and net (after deductions).

You can determine the amount of your monthly deductions, those of the government and the contributions to your pension and vacation fund.

Being aware of your deductions is a great way to plan ahead for your returns or tax payments as well as plan whether your retirement savings (do you need to compensate by saving more?)

Once you know your exact monthly income, you can start deducting your essential expenses (rent, insurance, car, savings, debt repayment, food, electricity, internet, etc.). The remaining money represents your game to splurge!

Know where your money is going

Well, you have calculated your essential expenses and your remaining money to spend on extras, but you still seem to run out of money every month?

It's easy to spend without realizing it. At this point, you have to take the bull by the horns and track all your expenses.

Whether it's downloading an expense-tracking app or printing out your bank statements, you'll eventually find out where your overflow is going.

Now that you know where you're overspending - it's time to cut! The important thing here is not to go into more and more debt every month.

Budget for what really matters

Finally, it is important to budget for what really matters.

If you realize that a lot more money is spent on trivialities than on paying off your debts or your savings, you have to redo your budget logically and move the amounts.

The easiest way to keep track then is to keep your expense tracking app and set a monthly and weekly budget in your planner.

Finally, remember that money is not that complicated. Just get started and your budget planning will happen on its own!