A restrained budget inevitably directs you towards minimalism which results in reduced monthly expenses. In addition, it helps you focus more on your needs rather than wants and helps cut down on unnecessary desires and splurge purchases. A restrained budget enables you to figure out what you value more in the longer term. Like saving up for that house down payment or investing in a second stream of income.
Moreover, it will help you reflect and ask yourself before you make an impulse purchase why you are purchasing that particular item. If the answer is not aligned with your long-term goals or values like getting out of debt or saving up more, then that item is not for you! If you’re ready to save up more and simplify your budget, then the following budgeting methods will help you get started!
Figure Out What Matters
Before creating a restrained budget, identify your goals and values. Reflect on why do you want to adopt a restrained budget and let go of those splurge purchases. It might be because you’re saving up for retirement or for that historic trip. In order to achieve those bigger goals, cut down on those coffee & bar stops every weekend. In addition, before you make an impulse purchase, think about how it will take away money from your trip fund and restrain yourself.
Cut Back On Impulse Purchases
Anything that counts as unnecessary spending comes under the umbrella of impulse purchases, and you need to rethink them. Essentials like paying bills, rent, loans, insurance are understandable, but coffee stops at Starbucks now and then can indeed be lived without.
Unsubscribe From Retailer Emails
Generally speaking, I, too, would be tempted to make an impulse purchase if I see promos for the same product on four different apps! However, the former doesn’t align with a minimalist budget. Therefore, you need to unsubscribe from all those retailer emails and simplify your social accounts and follow up only on things that motivate you to save up more.
Draft A Budget Plan
To create a restrained budget and save up more, you need to draft a minimalist budget plan that aligns with your lifestyle. Just to get started, you can refer to the 60/30/10 budget rule, which means that 60% of your pay would be deposited into your savings account, 30% would be spent on essentials, and 10% on entertainment costs.
Spend Less Than You Earn
Declutter your spending habits and live within your standards. Invest only in things that you value and are worth spending. In addition, ensure that a specific part of your earnings always goes towards savings and refrain from spending all your payout in any month. The former would not only mess your savings plan up but also take your long-term goals away from you!