In the last post, we focused on working on your financial management skills. Iâ€™d like to talk a little bit more about that in this post. I really like the Stogie Guys â€“ they seem to place as much importance on this point as I do. One of the tips on their post about enjoying cigars during the recession goes like this:
Developing a budget from scratch can be a daunting and often counterproductive task. Instead, take stock of all of last yearâ€™s expenses, then work backward. How much do you really spend each year? How much do you earn? What expenses can be cut? What allowances can be made? By building a template from last yearâ€™s budget, then whittling down unnecessary expenditures, you can develop a smarter and leaner budget for the year ahead.
Realizing that not everyone is cut out to come up with a budget out of the blue, they suggest a trick â€“ reverse budgeting. I find this very helpful as I think it would indeed be easier to estimate what you spent in the past year. To be honest, I doubt that if I were to undertake this venture, I would get down everything that I spent on. However, I am quite positive that I would at least be able to get down the major expenses and the expenses that I regularly spent on.
Going down this path, I am quite sure that I would be able to identify those things that I could do without for this year. And of course, I would be able to sneak in a bit of my budget for the occasional stogie or two. What do you think?