Blog Post by Matthew, Follow him on twitter here

As much as I would love to begin with a lavish introduction as to my credentials on being able to give financial management advice to anyone, I must say, I have none. But what I do have is life experience, and learning from the experience of others, the best ways to “live your life” while maintaining financial prudence and living within your means. So hello to you, I’m simply Matthew or @SmittyRoyal on twitter, who seems to be a completely different and more popular person than Matthew is.

So let’s start here. The simplest way to save is to NOT SPEND. Yeah, it’s just that simple. But of course not spending could mean for most of us, not having a life.

While working a regular 9-5 the average Jamaican earns between $30k (after taxes) monthly, to well in excess of $150k (after taxes) monthly. Yes, I do have friends raking in the big bucks, and yes, some days I wish I was them *sigh*. But as I am not them I have to utilize my money in the most economical way, which involves TREATING SAVINGS AS AN EXPENSE, and also HAVING A LIFE. Now these two things for me go together like peas in a pod. I refuse, as a friend said to me, to life my life as a miser for someone to inherit all the money I saved living a dismal and gloomy life, so that they can go and have a grand funeral for me, and then use the balance to “live the life” I neglected. This is where the ever so annoying Y.O.L.O comes in….and it is true, YOU ONLY LIVE ONCE, so do just that, live.

TREAT SAVINGS AS AN EXPENSE

Now before I get into how I do this, let me first make it clear, having a budget is a beautiful thing. I have developed a Budget for all my known expenses, with money in it that can be used for small unknown expenses, and then a savings portion that I do not even get in hand as that amount is wired straight to the bank (a great feature to have if your employer facilitates it). This is where I get into the heading, treat your savings as an expense.

In doing this, the money being saved will be regarded as “dead money” or “money spent” that you can’t get back (but in reality you can, because it’s your savings). This might take a little training of the mind, but once you establish that that money is no longer yours in the back of your head, then you won’t be so tempted to head to the bank to withdraw it, spending on some frivolous item (new shoes, jewelry, treating some new chick to the time of her life who clearly has no interest in you, just the experience she doesn’t want to spend her money on O__o) as soon as it reaches the bank monthly.

To be able to successfully treat saving as an expense, here is what you have to do:

1.   Remember that super feature of having the money go straight to the bank or other savings institution as a salary deduction. Well yes, that’s the first thing. If your Employer permits it, apply to have a set portion of your salary, the portion you can definitely do without, that amount you always seem to spend and regret through cognitive dissonance days later. Yeah, that little (or for some people LARGE) portion every month, send it to savings. Now this is a little more difficult for those who might not have this feature, but I’ll address that in another blog post. Don’t worry, I gotcha. Also ensure that you leave the debit card for that account at home, locked up tight or even at your parents home, in your old sock draw, far away from your tempted hands.

2.    In constructing your Monthly to Annual Budget, include all those items that you “have to pay” monthly as your first line of expenses. What I do is I list out each and every one of these expenses by name, such as my cable bill, internet bill, lunch money, gas/bus fare (transportation expense), grooming, life insurance etc. Those expenses that you can’t escape, have to spend on every month to simply live…comfortably. Now for some, this might take some tweaking of those inescapable expenses. If you are under 30 and don’t have life Insurance, don’t have any dependents, no family, then you can skip on the life insurance. But if you want mom and dad or that responsible relative to have it easy in case they outlive you and have to take care of funeral expenses, get some life insurance. It’s what a RESPONSIBLE ADULT would do. Then assess all the other inescapables. Some might be altered to reduce their amounts. If you have the porn stations on your Flow Cable, reduce your cable bill, take that package off, Porn is free on the internet!!!! And hey, if you want a few sites…I’ll post them in another blog .

3.   After tweaking the inescapables to their true unavoidable amounts (yes Sir, reduce your Cable bill by ridding yourself of the Porn Channels), the remainder of the money is solely for LIVING YOUR LIFE!!! But if you are still not sure, here is how you do it. Having a monthly Budget means you can easily convert it to having an Annual Budget. This helps you plan for those one off expenses that might not occur monthly but maybe bi-monthly or even once a year, such as Car Insurance, Registration and Fitness, School Fees, Dental expenses etc. With these things included in the annual budget, you now know of the months you have in which that excess income (using the term excess loosely) can come in handy to help you have fun. Those are your “FUN MONTHS”.

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