The financial headlines these days are grim: MORE CREDIT CARD DEBT! LESS SAVINGS! BIGGER MORTGAGE PAYMENTS! Most of us are painfully aware that the economy is not what it once was. Our nation has been abundantly blessed by financial prosperity for decades. Are those days gone forever? Hard to say, and even harder to know for sure if the United States will return to the days of living high on the hog. Sometimes I wonder if we got too comfortable as a country thinking nothing would ever change. But change is inevitable, and no one is immune from it.
If none of us are immune to this wallet-shrinking economy, what can be done? What can we do in our homes to slow the financial bleeding? The good news is that for every problem, there is a solution. In this case, the solution to your shrinking wallet is simple, easy to put in place and will create a change for the good in your household: BUDGETING.
As basic as it sounds, budgeting is the simplest and easiest way to take control of your money. At its core, a budget helps you track money coming in and money going out. Most of us know that in a perfect world, the money going out should never be more than the money coming in. You may THINK you know where your money is spent each month, but do you really know? Believe me when I say that the only surefire way to know if you’re spending less than you make is to budget.
As easy and simple as it may be, the idea of budgeting might make us uncomfortable and keep us from doing something better with our money. Why the discomfort? A budget forces us to confront our spending habits and all that goes along with it. If we’re being honest with ourselves, we may spend money when we’re sad, lonely, angry, or bored. Maybe we traded a drug or gambling addiction for a shopping addiction. Perhaps we’re managing our money the way our parents or loved ones managed theirs, and to imply they didn’t do a great job of it would be dishonoring to them.
A budget forces us to confront our spending habits and all that goes along with it.
When we hold the mirror to our finances and decide it’s time to change our habits, budgeting is the vehicle that will take us there. And budgeting leads to good financial stewardship. When we start paying close attention to how and where we’re spending money, we’re more likely to see opportunities to make changes in our spending that will immediately have a positive effect on our wallet. When our spending habits are in alignment with our goals, healthy finances are the result.
When you’re ready for change in your finances, here are three key points to remember as you get started:
#1: Don’t wait for the perfect time to start a budget because the perfect time is now! Half the battle of successful budgeting is having the mindset that you’re ready for change and actively seeking the way to make that change happen. The longer you wait to budget, the longer your financial situation will remain the same.
#2: Don’t overthink it! Budgeting is having a plan for every dollar that comes in and every dollar that goes out. It really is that simple! The great news is that if you’re new to budgeting, our tech-driven world is full of budgeting apps and free templates that are designed to help you without overcomplicating the process. Here are two options that I use with my clients: www.mint.com and www.vertex42.com.
#3: Don’t put it on a shelf! After you’ve created a budget, you must use that budget to get the most out of it. Make it a habit to review your spending each week and to update your budget each month with actual spending totals. And remember that your budget will change from time to time, too. When you cancel Netflix or pay off a car loan, make sure to update your budget to show that you no longer have those expenses each month.
If you feel discouraged by the economy and the drain it has on your wallet, consider budgeting. If need help getting started, contact me HERE. Together, we can create healthy finances by practicing good stewardship!
He that observeth the wind shall not sow; and he that regardeth the clouds shall not reap. ~Ecclesiastes 11:4 KJV