How Being Organised Gives You More Money

This month we are focusing on how we can spur ourselves to finish strong and achieve our goals. Research shows that among the top goals people set each year is to get out of debt. Another is to manage their finances better. From the onset, it appears the focus here is on how to bring in more income. However, what is not considered a lot is the fact that being organized can also add money to your wallet in the long run.

The best financial advice I received as I entered the corporate world was “it is not what you bring in that will make the difference it is what you have left after you have taken care of all your expenses...”

This advice has since served us well in the way we handle finances in our home. We always ensure that we live within our means. In addition to ensuring that you keep your expenses at bay, there are also other things that one can do to organize their finances and ensure they get the most out of their income. Below I share the top three ways we use to ensure that we get maximum use out of our income and also save for the future.

#1. Always prepare a monthly budget

Although some people say a budget restricts them from getting what they want when they want it. I personally believe otherwise. In my view, a budget reveals what resources are available and how they can be used optimally. John Maxwell described a budget as “telling your money where to go instead of wondering where it went.” 

A budget so to speak draws the right boundary lines for you. Not only does it allow you to manage what is available, but it also forces you to save. When I do our monthly budget, I start by giving (tithe), then I allocate to saving and finally, I spend the rest. When there is a surplus after all expenses are taken care of, this automatically goes to savings. Budgeting can also help you to live a fulfilled life as it shows what you have to deal with.

The internet is awash with free samples of budgeting tools. Experts recommend the Quicken accounting program www.quicken.com and the mint app at www.mint.com. I also recommend Dave Ramsey’s book The Total Money Makeover: A Proven Plan for Financial Fitness.

Personally, I use this simple budget sheet and update it every month to capture what will be needed for the coming month. Not only has having a budget allowed us to live within our means and be debt-free. It also ensures we are able to give and have fun yet set aside money for rainy days and invest for the future.

#2. Maintain a Wish List

With all the commercials before us, one is bound to give in and sometimes end up regretting. This is more so if it causes one to get into debt. My solution to avoid all this is maintaining a wish list. I keep a list on my phone of things I want to have. Doing this does two things. It allows me to sit with want and delay gratification. It also ensures I think before deciding whether we really need the item and can afford it.

Here in Africa in most cases, items are not available. If they are, it often costs an arm and a leg. A wish list enables me to keep an item in mind and take advantage of when we travel to obtain it at a better price. I have used this strategy several times and the result is I am able to surround myself with gadgets that simplify my life and yet they did not dent my wallet.

A wish list also comes in handy when there are sales going on. You know how sometimes you justify a purchase because it was 70% off and you later realize you do not actually need it? Well with a wish list when the sales roll around all you do is refer to your list as a guide for what it is that you want. This helps you avoid buying things you do not need simply because the price is good.

#3. Always have a plan

Peter Drucker was right “what you can measure you can manage”.  I find that when I have plans in place it not only keeps me organized and focused but also allows me to live within my means. I love these two quotes by Benjamin Franklin:

“By failing to prepare, you are preparing to fail.”

“For every minute spent organizing, an hour is earned”

You may be aware of the benefits of meal planning. Although it takes time to figure out what to cook for a particular period, the time you save plus the peace of mind it brings when you do this is priceless. You avoid wasting time or even preparing the same thing all the time which may cause your family to demand a take-out which ends up denting your budget.

Having a plan also means you know when to pay bills to avoid late fees as well as when to shop to take advantage of sales and stock up. This ensures that you do not leave everything for the last minute which causes you to shop for convenience and can be costly.

Finally,

Remember that when you take the time to organize your life, your finances will also follow suit. Get into a habit of paying yourself with at least 10% of what you make before you allocate money to other things.