Money management isn’t something that often comes to mind when talking about sustainable living, but they may be more connected than you may think.
Creating a budget was the first step I took when I was tired of living paycheck to paycheck and throwing my money away on loan interest payments. Having never created a budget before, I didn’t know where to start or what to include.
BUDGET BASICS
A budget is simply a plan that estimates your income and expenses over a set period of time and represents the flow of money in your life and home. Many online tools are available to help get you started (apps, spreadsheets, or old-fashioned pen and paper).
Start by adding up all your income and fixed expenses. Fixed expenses are your expected expenses, such as rent or mortgage payment, car insurance, etc. Next, determine the amount of money you have left to budget for your variable expenses and emergency fund by subtracting your fixed expenses from your income.
The secret to a successful budget is personalizing it to your lifestyle. This is done by tracking where you spend your money. Those who track their spending come face-to-face with their consumer habits, which helps identify areas to optimize.
WHAT YOUR BUDGET WILL TEACH YOU ABOUT LIVING SUSTAINABILITY
Setting financial and sustainability goals provides an endpoint to which you create the journey. My journey started with a financial goal (live debt-free), and my budget guided the journey to get there.
My budget with tracked expenses painted a clear picture of my spending habits. This was when I realized adjusting my consumer habits was an impactful way to live zero waste and reduce my carbon footprint.
CONSUMPTION HABITS
To manage your consumption habits and curb mindless spending, identify what enough means to you. Living with enough doesn’t mean being deprived of the extras you enjoy in life; rather, it’s identifying what holds value in the lifestyle you desire to create.
Curbing overconsumption reduces your environmental footprint because everything we eat, use, wear, drive and throw away comes from the Earth. The Earth provides the natural resources to manufacture the products we use and send to the landfill at the product’s end of life.
Reducing the number of products you buy saves money and reduces the demand for Earth’s natural resources. More importantly, being aware of your consumer habits will bring intentionality to your purchases.
Being intentional with what you buy has significant benefits such as, reduces clutter in the home, which has proven to reduce anxiety and stress.
BUDGET FOR INVESTMENT PRODUCTS
Did you learn how to save or invest money in school? No, me neither. Financial management is vital to understanding where you’re spending money and how it’s working for you. Chances are unless you seek out this information, you won’t think about it, or you’ll hire a financial advisor to create your financial plan.
Proper money management will help you save for sustainable products that require an upfront investment, such as a safety razor, capsule wardrobe or kitchenware.
This list will be different for everyone, but the process of saving will be the same. Don’t let the upfront cost of items deter you from choosing a sustainable alternative. Instead, find ways in your current budget to save for them.
SIMPLIFY YOUR LIFESTYLE
The most common phrase I hear is “I’m so busy.” We indeed live each day checking off our task lists and rely on convenience items to help us get through it. Most often, convenience items are the most unsustainable products.
Kick convenience to the curb and refine your time management skills. Just like anything, creating sustainable habits requires time and persistence. Time blocking your “adulting” tasks will help you manage your time efficiently so you can plan and prepare for sustainable habits, such as:
- Meal batching – choose a day and time to prepare dinners for the week. The upfront time investment will pay off throughout the week when dinner is already ready for you when you get home from work.
- Packing lunches – save money and waste by opting out of fast food or takeaway lunch. Prepare and entire weeks worth of lunches at once to save time and money!
- Shop secondhand – buy and reuse products already made instead of buying new products online or at the mall. Make time to browse thrift shops or online secondhand platforms like Craigslist or Buy Nothing groups.
MONITOR YOUR IMPACT
Tracking your spending effectively monitors your actions’ impact on your finances and the environment!
Knowing where you’re spending your money paints a clear picture of where you might be throwing your money away (credit card or loan interest, bank fees, unused subscriptions) and if the changes you implement provide wins.
This tactic can also help monitor how you’ve reduced your social and/or environmental impact. For example, if you’d like to spend less money on clothing and decide to cut out buying 1 or 2 outfits per month. You are saving money and reducing the resources that would be used to make another product.
Seeing the financial and environmental impact will keep you motivated to keep striving to reach your financial and sustainability goals. It provides feedback to reassure you’re on the right path and inform of any required tweaks to your plan.
Having a budget and knowing how you spend your money will eliminate purchases that don’t hold value in your life, freeing up extra dollars to spend how you choose. At this point, money becomes a resource or tool you can use for community development or supporting sustainable businesses. Start by looking at your credit card balance or bank statement to see where you may be overspending. With a little bit of effort, it can be something you look forward to every week.
