Productivity Tip #4 - manage your money more effectively

Get control over your finances

One part of getting control of your life, is to get control of your finances.

If you are like a lot of people:

• you get a regular paycheck
• you pay your bills
• you have your fun
• you save something once in a while

Then once in a while "the dreadful month" comes:

• all your bills seem to come at once (often near the end of the year)
• you don't have any money set aside
• reluctantly, you take it out of your savings

The process repeats, you save much less and you stress much more then you'd want to.

Zero-based budgeting can help. The very short version:

• you budget all of your available money for that month
• you define a number of categories (utilities, insurance, car fuel, rent, eating out, gifts)
• you prioritize the categories: obviously paying your rent comes before eating out

If you make an overview of your yearly expenses, and divide it by 12 (if the costs are not fixed, try to estimate an average cost), you know exactly how much you need to budget per month and what's left for fun/saving/ ...

I first saw this method on www.ynab.com but -ironically- I personally think the monthly fee they charge for the web app (I'm still using the now deprecated Ynab 4 desktop software) is not a good use of my money. But they have great explanations and videos about the method itself. Of course there are other sites about the method as well.

The goal:

• to know exactly how much you need for the necessities
• to create a budget according to your priorities (if you're a gamer and that makes you happy, no shame in budgeting a portion to buying games each month - as long as the necessities are taken care of first)
• to avoid the stress moments where you just seem to 'run out of cash' some months (not true, you just didn't plan and factor all costs for the entire year)

A big part of getting control of your life is getting control of your finances.
And zero-based (or zero-sum) budgeting might help you do just that.