This article is the third in our series about the habits of people who have reached financial well-being. If you have not read the first or second article, be sure to read them.
Thinking back to one of the first workshops I presented, I asked people what came to mind when I used the term “spending plan” or “budget”. There was a bit of a grumble from the back row. Flashing a smile, I asked the audience member if she would elaborate. After a moment’s thought, she said, “A budget is like a diet. It tells me what I CAN’T have, what I CAN’T do, what I CAN’T want”! I laughed at her honesty and wit in the moment, but as my experience has grown, I find there’s also a ring of truth in what she says. Few people count calories for the sheer enjoyment of counting calories. We do it for a purpose: to have more energy, a healthier body, and to live longer, fuller lives. Diets, especially those that will have long-lasting results, are ones started and continued for a purpose.
The same could hold true about finances. Few people get a rush of pleasure out of the act of balancing a checkbook or finding ways to trim expenses at the grocery store. However, there is a distinct pleasure and peace of mind in having the task accomplished and knowing that your finances are prepared for the next month.
My goal for you this week is to find your “why” to budget. What’s important to you? Is it to have credit cards paid off? And if so, what would you do with that $200 a month that you’ve been putting towards the debt? Is it to have a newer or more fuel efficient car? To take your kids or grandkids to Disney World? To be able to retire comfortably? It doesn’t have to be a long-term goal – perhaps, it’s just to talk with the teller at your bank about what kinds of savings accounts they have available or planning a weekend getaway for you and a good friend. Put those goals in writing and display them where you are reminded of them often. If you have a compelling “why”, you are much more likely to see the purpose of the plan.
Having a plan for your money is simply deciding what you will do with it. How much of your paycheck will be needed to pay your housing costs, insurance, and utilities? Review your bank accounts online and credit card statements to help determine what you’ve been spending in the past on these items as a guide. It’s best to be realistic and flexible with your spending plans. Realize that if you haven’t been planning before, you may not get the numbers exact and the budget may not balance perfectly on the first try. You will have plenty of months ahead of you to tweak your plan, and you don’t have to do it alone.
Apprisen has several great resources to help you jump start your spending plan, from certified financial counselors who will review your finances with you one-on-one, to other useful tools found on our website. Let me leave you with one specific concept: Yes, it’s crucial to pay the rent and other bills, but the way you’re really going to reach your goals is through savings. This points back to part two of the series- If part of the plan isn’t looking towards the future, it’s just continuing the cycle of living paycheck to paycheck, and the added stress that goes along with it. If you need advice on creating a spending plan, call us at 800-355-2227 or visit us at www.apprisen.com, and we’ll be happy to help you make your goals a reality!