Budgeting Is Your Key To Financial Freedom

Have you ever wanted to succeed or win with money?  We call this Financial Freedom.  What does that mean to you?  Think about what you were taught about money when you were young(er).  Did your parents talk about it?  Did they teach you how to balance your checkbook, create a budget and stick to it?  Did they teach you to keep envelopes with cash in them for giving, saving, and spending?  Some of us had those lessons and others didn’t.  Does that mean only those who had that education about money can handle it well?  If we weren’t taught about money, are we destined to struggle with it for all time?  Do we have to live paycheck to paycheck, just waiting to get that raise, promotion, or win a contest?    

News Flash…YOU can win with money and handle it well, regardless if you were taught good money habits as a child or not.  I was taught some good things about money, and also some bad things.  Do you know what the best part is?  You and I have the power to change our bad habits, create and enforce good habits, and make wise choices from this point on.  It’s not too late, it’s not too early.  The good news is it’s up to YOU.  The bad news is, it’s up to YOU.  You know Smoky the bear, where he says “Only YOU can prevent forest fires”?  The same principle applies here.  Only YOU can handle YOUR money well.  I can’t do it for you, your parents can’t do it for you, the government can’t do it for you, your kids can’t do it for you, your pastor can’t do it for you, and yes…even your Financial Planner or Financial Coach can’t do it for you.

It all starts with a plan.  That’s called a budget.  For the last 2-3 decades, this “B” word was treated like a cuss word by many.  The reason for that is that we as a people group were not in control of our spending and saving habits.  We thought the budget is in charge, telling us we couldn’t have any fun or do anything special.  The budget correlated to poverty or having to live on nothing. 

I can tell you that is the exact opposite way to look at the budget.  That is the reason people hate it.  They view it as the budget controlling them instead of them controlling the budget.  Have you been there?  I have.  For years I refused to do a budget because I was afraid it would tell me what I couldn’t do.  I heard all of the voices.  “You can’t go out to eat”, “You can’t buy that”, “You can’t go there”, “You can’t have ANY fun whatsoever”.  "Sacrificing all of those fun things is the only way to save money".  Sound familiar?  

Am I saying everyone needs to live on a budget?  Yes, you need a budget - if you want to win with money.  And, it's not that hard once you know what you are doing.  It’s not just for the people who can’t handle their money, the poor, or low-income families.  Everyone needs a budget.  The secret is you have to change the way you look at your budget and how you approach it.  That is the only way it won’t become a straight jacket in your life causing you to run from your money, which in turn causes so much of our over-spending, lack of savings, and very little investing for the future.

Keys to budgeting:

• Separate your expenses into 4 categories (I use the 4 "S's")
  • Survival - bills and expenses you need just to survive (food, shelter, utilities, etc.)
  • Security - items that will protect you from going bankrupt (emergency fund, insurance, money to fix your home and vehicle, etc.)
  • Sustenance - to "sustain" your lifestyle - expenses that are not absolutely necessary to survive, but we use to have a "decent" lifestyle (according to our definition)  
  • Surplus - Luxury items - only to be spent when you have all of the other items taken care of and are in a healthy financial situation
• Pay attention to the areas you tend to overspend and see if there are ways to reduce your spending
• Create a new budget for each month (as they have different needs)
• Match your budget to your values (put money toward the things that are most important to you)
• Give yourself a little cushion for the unexpected things that come up
• Constantly work on ways to make some extra money

These are just a few keys to making your budget work for you.  Budgeting is a skill so don't expect to be an expert right away.  If you need help creating or optimizing your budget, please reach out and let me know.