Oh no… The dreaded “B” word. BUDGETING. Some people are offended by it. For others, it comes naturally like eating and sleeping or walking and talking. There was once a time, well a few times actually, when you would never hear me utter the words, “That’s not in the budget,” but I find myself saying it quite often now and for good cause. Here are a few reasons why incorporating the “B” word into your daily lexicon isn’t such a bad thing after all.
- BUDGETING HELPS YOU ESTABLISH CLEAR GOALS: Is it your goal to start paying off financial debt? Is it to start your own business? What about a vacation in Belize this year? How about establishing an emergency fund or as I like to call it, a “shit happens account?” Do you plan to invest more this year? What about saving for your child’s college education, or perhaps saving for a down payment on a home? Budgeting makes these goals possible.
- BUDGETING GIVES EVERY DOLLAR A PURPOSE: By budgeting, you tell each dollar where to go, therefore giving you control over your money. There’s no guessing how much money you can save this month or how much you can save from this pay check, that sale, etc. IT’S RIGHT THERE ON PAPER… AND IT’S DONE EACH MONTH. Budgeting keeps you on task. Think of it as a map to your financial freedom. That’s part of the purpose right? You can’t reach an unknown destination without following a map or guide to point you and keep you moving in the right direction.
- BUDGETING HELPS BUILD HEALTHY RELATIONSHIPS REGARDING MONEY: Spouses and partners who budget may feel more as equals in the relationship as opposed to one person being responsible for how the monthly income is spent. THE COUPLE THAT BUDGETS TOGETHER STAYS TOGETHER. Keep in mind the majority of marriages/partnerships end not because of infidelity, but because of money issues. Having a monthly “sit down” to discuss your finances is a good way to keep the lines of communication open and flowing. Not only can this method be beneficial to spouses/partners, but to parents and their children. Allow your child(ren) to have some input regarding the monthly budget (although they don’t of course get the final say.) By doing so, you are teaching them financial literacy at an early age and allowing them some level of autonomy regarding the household finances at the same time.
- BUDGETING HELPS IDENTIFY “TROUBLE” AREAS AND/OR BLINDSPOTS: Perhaps you’re spending too much money on entertainment or realize you have more discretionary income than you thought you did. Perhaps after reviewing your budget from last month, you’re not saving enough money to reach a financial goal. Budgeting can easily help you identify those trouble areas/blindspots so you can make any necessary adjustments.
- BUDGETING HELPS YOU FORM HEALTHY HABITS IN OTHER AREAS OF YOUR LIFE: Once you get into the habit of budgeting your money each month, other habits will begin to form as well. Perhaps you weren’t very organized until you started budgeting monthly. Now that you are, you may begin to notice yourself writing “To Do” lists, decluttering and organizing your space therefore decluttering your life. You may notice a shift in your mindset where subjects or topics that were once important to you, no longer hold its value in your thought process. You may even find yourself spending less time with friends/acquaintances you once had. Budgeting can manifest itself in the form of “reprogramming” the mind. I may be “reaching” here for some, but in the grand scheme of things for those who have experienced a change in your “financial mindset,” you may or have experienced this change in mindset and can truly relate. Change is good.
Keep in mind, for your budget to work, you’ve got to put it to work. It won’t be easy in the beginning, but stick to it. Stay the course. Some behaviors will have to be learned, others, unlearned and in some cases, totally forgotten. To create a budget and not follow it through is surely a lesson in futility, but I know that’s not you. NO WAY! You haven’t come this far to stop and turn around. There’s nowhere to go but up from here.
Click on the “Worksheets” tab of my website to download the Monthly Cash Flow/Zero-Based Budget Worksheets to get you started, or you can click the link below.
~The Financial Hack (copyright 2015)