Save more with less effort? Sounds good to us. Budgeting has a long-standing reputation as the restrictive, boring antithesis to your best life; but what if we told you we’d found a way to save big with less effort?
Keener than a Bachelor contestant in a penguin costume? Say hello to budget cycling.
What Is Budget Cycling?
Budget cycling was a strategy I came up with when I wanted to get my finances in order. As someone who’s notorious for going all-in on a new habit for a couple of weeks before not just falling off the wagon, but being unceremoniously thrown from the wagon, I needed a better way. A way I could leverage my sporadic spurts of effort to my advantage. So, I decided to apply a cycling system.
Similar to the principles of intermittent fasting, budget cycling or financial fasting involves budgeting to varying degrees on different weeks. Some weeks you’ll live very lean, saving a huge chunk of your income and spending very little, and others you’ll save almost nothing and enjoy extra cash to spend.
How Does Budget Cycling Work?
First of all, you need to work out how much space you have between your income and your expenses. Then, once you know how much you’ve got available, you can decide how you want to cycle that so you stash the most cash with the least amount of effort.
Let’s say you earn $800 a week and have $400 of expenses. You’ve got $400 left over that could be saved, but of course, you’ve got to live your life.
To save $400 a month under a static budget plan, you’d need to save $100 a week. But, with budget cycling, you might choose to have a Netflix-fuelled low key week the first week of the month, where you live on just $100 and stash $300 into savings. Then, the remaining 3 weeks of the month, you can live on $375, and stash just $25 a week, and still hit your $400 a month goal.
Alternatively, you might want to do alternate weeks. You could save $200 one week, $0 the next, $200 the following week, and $0 the next. You’d still hit your $400 a month goal, but by only cutting back half the time.
How Do I Make Sure I Stick To My Budget Cycles?
Alright, I hear you. Having that one lean week sounds easy in theory, but what about when it’s your mate’s birthday one day and wines with the girls the next? The easiest way to make budget cycling work for you is to make your lean week(s) a habit. A concrete fixture in your calendar that you respect as much as you do your Bachelor + pizza night.
Get into a routine of blocking out your social calendar on your budget cycles, and even recruit your friends to do it with you. If you all agree that the first week of the month means no takeaway, no oat milk lattes, and a girls night at home watching Netflix drinking $10 wine from Dan Murphy’s instead of going out, you’d all stash extra cash in a concentrated period of time, leaving the rest of the month free to live your best lives!
Right, that’s your new budget hack sorted. How about these 11 nifty ways to make your cash work harder this financial year?
Emma is a finance blogger at The Broke Generation and a reformed spendaholic. She shares hot tips on saving, property, tax, career and investing for millennials who want to break the spending cycle and get financially confident.
Image Credit: Frankie Cordoba