Let’s take a moment to define or redefine a term that many of us shy away from. That term is Budgeting. I had a conversation recently. I told the person, in order to reach their financial goals, they would need to start budgeting. We were having a great conversation, but when I said the word “budget”, I was met with resistance. Why do we dislike the word budget so heavily? Budgeting is not something that we should run away from. The fact is, every book on wealth building starts with the ability to plan your finances. A budget is a written plan telling your money what you need it to do.” Even simpler. A budget is a plan to intentionally spend your money.
Some of us have it in our heads that the idea of financial budgeting means a lack of money. When the contrary is actually the truth. Budgeting allows you to see exactly what money you have. In many other areas of our lives we seek out information on budgeting, but when it comes to our finances, we look at it as highlighting what we are lacking. Here is what I mean:
- We look for ways to budget our time, so we can accomplish everything that we want to in a given time period.
- We look for ways to budget or physical resources to make them last longer; because we want to don’t want to waste resources.
- We also budget our calorie intake, so we can maximize our efforts towards weight control.
When it comes to budgeting our finances, many would choose to increase credit spending instead of setting up a budget. Some even choose to try to increase income with various side jobs and business opportunities. But with more income comes more spending. Without a plan to control their money, many find themselves right back where they started.
During the 2008 financial crisis, I focused my energy budgeting. I focused on getting to know what it took to run my house, save for the future, and live for the day. I took a look at my finances and discovered that I was spending money on things that I really didn’t need. Once I cut them out, I actually found more money. In essence, during the 2008 crisis, I got a raise!
Now, speaking truthfully, the first time I sat down to implement my budget, it didn’t quite work out the way I planned. It did, however, provide me some feedback in order to make the corrections for the next month. This is where many people stop the process and give up. Claiming that budgeting doesn’t work. I kept at it though, and month after month, when things didn’t work as I planned, the feedback I received from that failure, allowed me to make adjustments. Until eventually I didn’t need to make any adjustments. The process was working, and I was able to repeat it every month.
By taking the time to see what my failures had to tell me, I learned how to budget, in a struggling economy, I flourished. I’d discovered that Dave Ramsey’s statement is true! “You have to tell your money where to go before it tells you where it went.” I discovered that when you properly manage your money, there is more than enough money to do the things that need to be done. You may also discover, as I did that you have some to save and do the things that you also want to do. I promise budgeting is not a 4-letter word. It is the pathway to prosperity.
Resources
The Index Card: Why Personal finance doesn’t have to be complicated.”
Corey Stokes 