Let’s dive into what budgeting for you looks like while paying off debt and while you are debt free.
Budgeting for You When Paying off Debt
Can you enjoy life when paying off debt? I say yes, as long as you keep the end goal in mind. The goal is to pay off all your debt so that you can save, invest in your future and the things that bring you joy. Make a clear list of your goals and the reasons you want to be debt free. Keep these reasons in the forefront and remind yourself every day.
But, how can you make time for you in this process? By adding you into your budget. Are you a foodie and genuinely enjoy experiencing different foods? Does traveling reignite and energize you? I believe that you can budget for these things within reason. For example, you could designate funds for going out to a new restaurant one day out of the month. Or you could travel to somewhere in your city that you have never been. Living on a budget and paying off debt should not be restrictive and life altering. If you keep the end goal in mind you can make room in your budget for you even while paying off debt.
Budgeting for You When You are Debt Free
I’ve paid off all my debt now I can do what I want! Well, not so fast. While you are debt free and have more leeway in how and what you budget for, don’t forget your reasons for being debt free. That being said you can allocate more funds towards the things that you enjoy. After you have budgeted for your expenses, savings and investments, now you have more disposable income for you. Think about the things, hobbies, experiences that you enjoy. I emphasize experiences more than things because spending money on things may lead you back into debt.
So, how can you budget for you? First, save for the things you want to buy over time instead of impulsively buying. If you want to go on vacation save that money over time so that you are not paying for a vacation after your vacation. Secondly, add your hobbies into your budget. Calculate how much engaging in this activity would cost you per year and divide that by month so you can allocate those funds into your monthly or weekly budget. I believe that if were are disciplined we can live a fulfilling and enriching life even while on a budget.
Check out my post on Budget Basics to learn more about creating a budget