Abundance mindset in budgeting is one of my keys to successful budgeting. Starting your budgeting journey from a place of abundance can really help you to get out of debt.
If you are in debt and you are preparing to go on a debt free journey, then this is one of the 7 pre-budget steps for budgeting beginners. See what you own and what you have in savings before you start. This abundance mindset from the beginning sets the tone for your debt free journey.
When I started my no spend year in 2017 I figured that there were 7 steps that you needed to take before you wrote your first budget so that you can set up your budget for success in the beginning.
This post is step 6 of the 7 pre-budget steps you need to know before you write your first budget:
Knowing the amount savings have and the amount valuables own.
Jump Ahead To....
February 2018
If you know these things you can decide if you want to utilise them in your debt free journey. I swore that the one thing I would not sell was my beautiful piano at the beginning of my debt free journey. I was painfully aware of how much it was worth every evening when I sat in front of my TV with my reflection clearly visible in my black satin finished Yamaha.
7 months into my no spend year, it was up for sale. Why? Well as I did my no spend year I came to a lot of decisions on what I had planned for my life and teaching piano no longer fit into that plan. It is a long story but it did not sell in time to contribute to my no spend year debt pay off but it did sell the following year and I was free to use the money for other things of my choice (including a piano that wasn’t worth more than my car)
Choose Your Sacrifice
Because there always is one. There always has to be a sacrifice to move forward and it may be the one thing you promised yourself you’d never do. My point is this, if you want to make a major change sometimes it takes big steps. Sometimes you have to let go of things and choices that you may not have done had circumstances been different. I looked at my savings at the start of my no spend year and swore that no matter what I would not use them to pay off debt. 10 months later I used those savings to pay off the remainder of my car loan I was so desperate to get out of my no spend year early!
5 Tips On How To Carry Out This Step
Write down how much you have in savings.
You can decide if you want to include savings that you have put away for younger children if you wish. If you have time to save that money again in time for its intended purpose it may help you get out of debt faster. I won’t offer any opinion on that as it is entirely personal but it is something I have seen people do as they get out of debt.
List the most valuable items in your home.
Calculate their value by researching online. Looking up similar items on buy and sell platforms like Facebook marketplace can be helpful in finding out the value of your possessions. You may not want to sell any of these things at all in the beginning but knowing where you stand with your money is one of the best ways to set up your debt free budget for success.
The next phase of this step is to go around to each room of your house and organise it.
Have you 5 bottles of shampoo in your bathroom and 3 can of hairspray in your dressing table? If you have then maybe you have similar things happening in your cleaning cupboard. Figure out well stocked you house is with these kinds of items and commit to using them before you buy more. This will help you to get a good head start on your first budget as you wont need to buy the things you already have in the house.
Check through everyone’s wardrobe.
I started my no spend year and my first ever successful budget in August of 2017. We were preparing to go back to school and to get ready for winter from a financial perspective so I checked to ensure that last year’s winter coats, shoes, hats and gloves were still in good shape. I also checked the house for all kinds of supplies for school and winter that I had in the attic, the bedrooms and the shed. I saved a fortune on stationary that year as I had a whole load of supplies tucked away in nooks and crannies.
Write your first budget for a few months in advance.
You may not stick to it but the practice of doing that with the knowledge of all of the supplies that you may have found in your house, highlights 2 things. (1) Time goes quickly and money spent today will be needed in a few short months. (2) The things we buy from week to week mindlessly are often duplicated of things we have at home already hidden away in a cupboard. With your new found abundance mindset in budgeting, you will find it easier to write your budget and leave out the things you already own. I did not feel any lack in not buying things when I knew I already had them at home.
