In the last post, we focused on working on your financial management skills. I’d like to talk a little bit more about that in this post. I really like the Stogie Guys – 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 year’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 year’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 – 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?