How to budget for regular events
Published On August 3, 2022 » 776 Views» By Times Reporter » Business, Columns
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THIS past weekend, Zambia held the 94th Agriculture and Commercial Show under the theme “Innovation through Technology – Technology Transforms Businesses”. It was the first time in two years that the event was being held physically due to health guidelines that were implemented at the peak of the Covid-19 pandemic.
I had a chance to visit the show grounds on one of the five days. Seeing all the activity; the crowds, children with painted faces, the music and all the exhibitions brought back old memories of how I always looked forward to this period as a kid. It was always refreshing to take part in various games, purchase toys and interact with other children.
What I never knew then was that all that activity came with expenditure – money was being spent. Going there now as an adult, my perspective was totally different.
I witnessed a lot of impulse buying – people spending on things they evidently did not plan for simply because they were appealing to their eyes. I watched this with one hope in mind, a hope that the money being spent was budgeted for.
One of my observations over the years is that Zambians generally do not do so well with prior planning.
This is also seen in our financial decisions and habits.
All of us knew that we would have this event many months ago, but I can bet that only few of the people who were at the show grounds were spending money they had planned for months ago.
Today’s article looks at a few tips we can adopt to plan for such regular events in order to avoid spending impulsively using money meant for other expenses. Would you love to attend next year’s show and purchase things or pay for services without having to regret, afterwards, of how you spent money that you were saving for your children’s school fees?
Here are some of the ways you can get ahead of time and spend within your plans.
The first thing you need to do is that, at the beginning of every year, you need to come up with a financial plan for the year. Do a mapping of all known events that may require you to spend more money than usual in particular months. Such events may include Birthdays, Black Friday, Weddings, Travel and activities such as the just past Agriculture and Commercial show. Listing all these events and including them in your financial plans for the year may reduce the pressure that comes with financing them.
Secondly, you need to estimate how much you will spend on each of these events. After listing them, assign an amount towards each of the events. When doing this, you have to be as realistic as possible by taking into account certain realities such as your income size, your financial goals, your financial priorities and other financial responsibilities. Taking this realistic approach will help you to only spend what is within your means for such events and occasions.
The third thing you need to do is to start saving towards these events. If possible, you can open a separate savings account specifically for such expenses in order to better track your progress when saving.
Once you start saving, you need to be consistent. One of the ways you can develop consistency is by automating your savings. A good way to do this is by setting a Standing Order on your salary account to transfer a specific amount to your savings account on a monthly basis.
If you are married, involve your spouse as much as possible in order to obtain the right support.
Fourthly, for events like birthdays, that involve purchasing of gifts, you may decide to buy certain gifts early. Prices of goods are always rising. By buying certain gifts early, you save yourself from the effects of inflation by buying them cheaper than you would if you waited to get them a day before the event.
The final thing you should do is to stick to the budgeted amounts. For any event, never spend more than the amount you purposed to spend at the time you were planning for your events for the year.
Stick to the budgeted amount for each event. For occasions like the just ended Agriculture and Commercial show where you may not know what exactly you are likely to spend on until you see it exhibited, it helps to only carry an amount equivalent to what you have planned to spend in order to avoid overspending. Avoid carrying credit or debit cards as they may tempt you to spend beyond your means.
Financial discipline is not easy to achieve. It requires patience, practice and conscious efforts to attain. By using these tips, you could avoid falling into debt or financial stress as a result of impulse buying.
Be financial smart and plan your finances.
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