“Yuh stay deh, try don’t grow up too fast.” That’s what our parents always said when we envied their freedom to do what they wanted when they wanted. Now as an adult, we wished we heeded their advice and enjoyed our childhood a bit more because adulting is hard! One of the biggest challenges is balancing our income with our expenses and savings. Here we will go through some tips and strategies to get your finances in shape for 2019:

  1. Build Expense Categories and Expand

These categories will help you to organize your expenses under a common heading. Categories include Food, Utilities, Entertainment, Rent and Savings. Once you have built your categories then it is time to expand and fill in what specific expenses fall under each line item. Food would include groceries, lunch and dining out. Utilities would include items such as electricity, water, cable. Entertainment depends on your lifestyle, this could include a few parties for the month or activities for the kids or going to the movies. Rent includes your monthly payments for your home or apartment as well as maintenance fees if you live in a gated complex. Savings could include retirement savings, school fee savings, emergency savings among other things depending on your lifestyle and needs. An easy way to organise your categories would be to add them in an excel sheet with a tab for each month.

2. Use the Cash Envelope System - Budget Planner

Once you have created your categories and your budget in excel, the next step is to utilize the cash envelope system. With this system, you withdraw the cash needed for each category and sub-category and place them in envelopes in a safe place in your home. This system ensures you spend only what was budgeted for and no more. Many of us think we can budget properly using our cards and we sometimes find ourselves spending more than we intend to, because the money is not segmented based on our budget in our bank accounts. This can lead to overspending and mismanagement. The cash envelope system solves this issue by helping you to track your money. We also tend to think twice about spending hard cash compared to money on a card.

3. Savings and Goals

One thing not to be overlooked in the budgeting process is short, medium and long term goals. These financial goals need to be included in your budget as line items that you are saving towards. It might seem daunting as many can’t see what from their income can be saved, but as we say in Jamaica, every mickle mek a muckle. Short term goals may include things you would like to achieve on a monthly basis. This may be something personal or healthwise that needs attention. Medium term goals may include your quarterly goals such as school fees, learning courses or something for the home. Long term goals are those things you want to achieve in a year and beyond. Retirement, vacation and home purchasing are items that you need to save for in the long term.

Whether you're just starting out in the working world, have been working for a bit or are a seasoned professional, getting your finances in check and on a budget will serve you well for future success.