I was talking to some people about the notion of needing a budget in order to keep your finances in good health. Basically, each month you should be writing down how much you have and how much you can allocate to certain things such as entertainment or essentials. The funny thing for myself is I personally don’t use a budget in that sense. Instead, I keep myself constantly in tune with how much I have and how much I am spending. With that it becomes like a challenge of sort where if I am going to take money out of an account then I always ask myself how fast can I replenish it without it harming the ability for the funds to grow. It really makes me think of my purchases and the future.

For example, I know a lot of people would think having zero dollars and no debt is the safe zone. However, to me for example $10,000 would be like a safe zone and it makes me want to at least maintain that number and make it go up. I guess another way to think about it is it’s kind of like food and your health. Some people would say you have to follow a strict diet plan if you want to keep the pounds under control and others would say you just need to be constantly knowledgeable and aware of what you are putting in your body. For me, being aware is more of my preference personally as with that it’s a lifestyle habit and not say a one time thing.

I have often heard the argument that going with being more aware route must be stressing as each day you are worrying about what to buy. It’s really not the case, for me anyways. It’s almost like my mind is accustomed to quickly going through an algorithm where I look at the product, the price, I start thinking about value such as if the item has ever gone cheaper, think about any goals I have in the future and whether or not this item will help me, etc. If it passes all these quick flash tests then I can start seriously thinking if I should spend the money.

To me it is no real difference than say people who wouldn’t eat a piece of fruit because it smells bad or has bruises all over. Basically, it’s not like you stand there for hours debating if you think it will be good for you or not. Instead, you have naturally learned that those are potential signs that the product isn’t that good and that putting it in your body can mean bad things later. In my opinion, having this same approach with money is the way to go in my view.

Since there is an election here soon, today was the day that all the main candidates did a live televised debate. For the most part I was expecting a a stereotypical political debate with people avoiding questions and trying to make others look bad. Since the economy and provincial debt was a big issue I was actually interested if people could actually learn any good financial management lessons from the government, so to speak.

If I was to try and relate the situation and answers that I heard compared to an average person’s financial challenges, it almost sounds like a person living in say a million dollar home with a mortgage that is way beyond their means while trying to raise a family. As a result, to me it feels like their solution to pay off that debt is to continually pay for various ways to try and give their kids resources and support that they feel would give them a competitive advantage in life where hopefully one day they will grow up and help them to pay off their debt.

How would you go about paying off that debt assuming the scenario is you cannot say move to a new home? Like in this case I highly doubt people would want to tell their kids for example that they can’t say go to a good school because of financial restraints. So they would instead rather incur the debt. Trying to think of a solution in this case, I think one obvious solution that many would do is make more money. That usually comes in the form of potentially doing side work or starting a part time home based business that requires very little investment if any.

What an interesting thought that was I thought. For example, instead of a government official trying to reduce a debt by being like a venture capitalist when they don’t have the money for it they need to literally find a way themselves to build something from ground up as would a regular person where the cost is more about their own labour and creativity. That is probably not plausible of course due to things like a conflict of interest that would probably arise. But that would be kind of neat I think.

While this is probably boring for many, I think stuff like this is a good way to learn from someone else’s experience even if they didn’t produce the desired result. It’s almost like an entrepreneur reading horror stories so that hopefully they can avoid the same mistakes.

I found this conversation kind of funny today. Essentially, there was a person who was trying to find ways to save money. So the first step was to lay it out all to see where all of their money was going to and from there we would try and see where they could save money. As usually you saw things such as regular household expenses and non necessities. What I thought was interesting was how in the category of necessities the person had an attitude of since it is a necessity there is nothing you can do about it. For example, like the electricity bill.

However, after looking at the bill itself it did seem kind of high. Sure enough, if you looked at the person’s house he did so many things that was simply wasting a lot of money. For example, having chargers still plugged into the wall, which actually still uses electricity, or having a habit of leaving the computer or lights on even when he is not using it. While it may not seem much, it definitely adds up.

I suppose the same can be said for even like groceries. If you seem to be paying a lot, similar to hunting for the best deal for TV you should shop around. Thinking just because it is a monthly essentially that there is no way you can do anything to save more money is a mindset that should be fixed I think. If you spend as much time looking for the best deals when it comes to non essentials you can easily apply that financial savviness for your life essentials too.

I had a conversation with a person today on whether or not we should expand certain resources for this activity as it seems like it has been growing to the point where it would be justifiable. However, of course the issue of money plays a role and when presented with how much the non profit actually brought in a year he immediately reacted humorously in a way to imply that with those numbers for sure they can’t expand at the moment.

There were then some talks about how it sounds so little though in terms of how much we would need to expand the resources and so instead we should take a expand a now and worry about the money later approach. In a situation where funds are unstable this would remind me of say constantly piling up one’s credit card bills with like $5 meals as at the time it seems so little anyways. But eventually it adds up and not having a stable income flow usually results in more stress than its worth.

I personally still believe in situations like this you should budget with what you actually have. For example, if you want that new service that will be say $120/year, even if you are only paying $10/month you should make sure that you actually do have $120 in the bank so all you are doing is re-distributing the funds. In this case, do the fund-raising first and see if you can get enough as opposed to hoping you can get it later.

The other day I was reading how a company this year decided t put some money aside specifically for gifts and free food for their employees in hopes that it helps to raise morale and ultimately productivity. Reason too was that this was very low in terms of a budget and that the benefit could probably be very high.

That is something to think about as doing just the little stuff to show appreciation for your workers can often motivate people to work harder for you. I think that is the case in many situations as showing that you care about people usually makes them care more about you as well. Just can’t forget that you are working with real people and not robots that just turn on and off.