Budget tips

Effective management of expenses


Managing expenses is conceptually similar to managing time. Time is managed effectively by prioritization with reference to urgency and importance. Anything important must be done before it becomes too urgent. Urgent matters must be dispatched without further delay. This process of prioritization weeds out all irrelevant tasks.

Expenditure ought to be prioritized by reference to urgency and importance for effective management. Basic needs such as food and housing must be met. This process of prioritization highlights expenditures on flummery that can be eliminated. The key to good money management is to clearly understand what is important to you. If it is not important to you then you do not need it. Every expenditure must first meet the question “is this important enough to warrant the expenditure?”.

The key to good budgeting is a keen understanding of what is important to you. This is the most important point when managing your expenditures.

Prioritisation enables effective use of your money. The efficient use of money is conceptually similar to the efficient use of time. One has certain tasks to perform at work. Those tasks are not done simply for the sake of completing them. Each task is to achieve a purpose. It is achievement of the purpose that matters. The task is the means to that purpose and could be done in a different way. Efficient use of time consists of finding better ways to achieve that purpose. One may even question whether that purpose is worthwhile in which case the task may be abolished.

Money is spent for some purpose. Money may be used more efficiently by consideration of the purpose of each expenditure. Look for more economical ways of satisfying that purpose, Shopping around is the most obvious way of introducing economies. Amendments to lifestyle choices are a good way to reduce expenditures without sacrificing quality of life.

Review your motivations for buying. A lot of consumer behavior is driven by selfishness, vanity and wishful thinking. Consider how your own consumer behavior is driven by selfishness, vanity and wishful thinking. That is normal consumer behavior so do not fall into the delusion that you are an exception. Looking at my own expenditures in this way has proved very beneficial to me. I suggest it will prove beneficial to you. Looking at ones’ own behavior in this way is a very uncomfortable experience. It is a bitter purgative which yields salutary benefits.

It should now be clear to my readers that the preparation of a good budget does require changes to spending habits and lifestyle choices.  Preparing a budget is simple. Changing habits and amending lifestyle are not easy. Changing habits will be a challenge. I advocate writing down all expenses for at least three weeks and constantly updating daily and weekly budgets. My readers who take my advice can expect a difficult three weeks. There are hard decisions to be made. There are penetrating questions to ask ones’ self.  It will require self discipline and prudent forethought to break old habits and start fresh habits.

5 thoughts on “Effective management of expenses

  1. ” Preparing a budget is simple. Changing habits and amending lifestyle are not easy. Changing habits will be a challenge”. This was my biggest challenge during my debt repayment. Great post.


  2. I love the idea of not only linking money and time (many people already understand that due to pay often being linked to time), but also linking the prioritisation methods/decisions. I think it is a much better way to look at things than “what to cut out” or “what not to do”.


  3. I like applying a prioritisation method to rank the priorities to pick those few priorities that really are the most important. And to weed out the trivial. If one has too many priorities then one really has no priorities

    If one looks at “what to cut out” one can, in most cases think of a reason not to cut out that particular expense. That can result in nothing being cut.


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