This last month I’ve been discussing a scary word. Budgeting. It is a subject that is on my mind quite a bit and funny enough, comes up in many of my daily conversations. I enjoy hearing the perceptions of others on this topic. One conversation, really got my wheels turning. It started with one sentence. “I don’t budget because I want to enjoy life now.” I’m sure you can see where this is going, already.
The world today tends to push us into the “I want it now!” behavior. Yes, that spoiled child syndrome that makes us all cringe. Does anyone remember who fell down the rotten egg chute in the original Willy Wonka movie? Yup, the “I want it now!” girl. There was a time when this type of behavior was frowned upon and actually quite embarrassing to those around that self-centered and demanding person. Now, the world has embraced this behavior. Why save, when you can use a credit card? Why put away for your old age, when you can travel the world now? Television, radio and the internet are always pushing some new and grand thing for you to throw your money away at.
Take a step back and take a look around you. The race to have more is really not worth jumping into. The more things you acquire the less time and money you have for the truly important things in life. Money and things do not obtain happiness. In fact, what happens is there is more stress and less happiness.
Budgeting should not be looked at as a tool that gives you less in life, it is a tool that helps you to acquire more in life. More of the good things.
When you budget you create:
- Knowledge: You know where your money needs to go.
- Control: You control where your money goes.
- Peace: You don’t have to stress about the unknown (as much).
- Money: When you control your money and think about its use, it begins to grow.
Budgeting is not meant to make you feel guilty, insecure, angry or like a failure. Budgeting is a tool and when that tool is used properly, you gain from it not suffer from it. Ignoring your money and pretending the debt doesn’t exist will only create a bigger monster in the end.
A Budget is a Living Thing:
Your budget is not something you scribble on a notepad and shove in the drawer and forget. It is something that is “living”. Now, with that said, it is not something to obsess over. Set aside some time weekly to review your budget, if you are married, make sure you do this with your spouse. See how you have been spending your money, assign it to a category. Do NOT put credit card purchases in a ‘black box title’ such as Credit Cards. Actually list out what you made that purchase for. You will very quickly be surprised on how much a week you may be spending on things like breakfasts, lunches, coffee, snacks, entertainment without even blinking an eye. When you put a name on them, they become real.
My goal, or happy place, is to be able to budget for three-quarters (or better yet, half) of our house income. Yes, you read that correctly three-quarters of our total house income. That does not mean that this happens every month there are times I don’t make that goal. What it means is it gives me a line to shoot for. This way, heaven forbid, if something happens to the “good times” income and it gets cut, we can still thrive without too much stress. Notice I said thrive, not just survive. It also gives me a challenge and I love a good challenge.
I’ve mentioned this many times, but I love the way that Dave Ramsey’s Financial Peace utilizes their online budget tool Every Dollar . It lays it out perfectly. Especially when paying off those credit cards because in reality, when you pay these off you are gaining money. Once they are paid off, close as many as you can, especially the high interest rate ones. The Every Dollar budget tool offers a subscription version and a free version. I tell people to utilize the free version for 2 reasons: 1) It’s free and not another expense. 2) It forces you to physically write what you spent the money on. The paid subscription version allows you to connect to your savings, checking, credit cards to automatically bring in transactions, but you have to place them in your built budget. Their paid subscription also will not allow you to add an American Express Card, or pay for the subscription using a credit card, you must use a debit card or a checking account to pay for the annual subscription. Both the subscription and free versions are available on both PC and phone/tablet app versions for Android and iPhone apps. With any budgeting tool, it works best when you work with it often. I budget daily or nothing less then once a week.
Put extra money that you are no longer wasting on things to paying off debt. It is not as hard as you may be thinking it is. The outcome is less stress and fear. Now, when you do pay it off, don’t go “celebrate” with some big shopping spree or dinner out or a vacation.
Budgeting allows you to live below your means which gives you freedom from stress and freedom from being a slave to needing more. It allows you to give time to what is truly important; relationships and your health as a whole.
So don’t look at budgeting as this big scary monster lurking in the dark, look at it as a garden just waiting for you to plant and watch it grow.
Until next time,
Mrs. Kay Lynn Rice