4 Things No One Has Told You About Budgeting

Making a budget is a marvelous first step, but far too often that’s where the fairy-tale ends for most.  Let’s face it . . . Finding a budget template is not much more than a simple Google search away.  The issue most of us have is figuring out how the heck to stick to it!

The reason so many people give up on using a budget is because the one they have created is far too rigid, intimidating, complicated and restrictive. 

Here are four things people don't tell you about budgets before you download their fancy spreadsheets:

1.   Attitude – First and foremost, your attitude toward creating a budget has to be healthy.  If you think that budgets stink, then guess what? . . . Your budgeting experience is going to stink!  I usually have clients call their budgets something along the lines of a “Prosperity Plan” or “Wealth Building Map.”  The title doesn’t matter as long as it gets you excited about managing and mastering your money and further away from furrowing your brow!

2.  Purpose -  A budget should have a defined goal you would like to achieve within a specified time period.  Having a goal in mind will help you keep focused when your discipline begins to wane and feel more like deprivation.  Once utilizing your budget helps you obtain a goal, set another one.  Never become complacent when there is always a goal you can be striving toward.

Financial Book Review: A Purse of Your Own

Warren Buffet is known for saying that investing and dieting are alike, in that they’re both simple and yet neither is easy.

I couldn’t have agreed about the simple part until reading this book! . . .

If I had more than two thumbs, they’d all be pointed upward for Deborah Owens’ A Purse of Your Own.  In this radiant financial read, Owens uses the purse as a metaphor for wealth, understanding that you can typically grasp a concept when you can readily relate it to something in your own life. The purse illustrates that finance based concepts, and specifically investing, is not nearly as complex or foreign as one might believe.

Related Post: Book Review: The Frugalista Files

Having a full purse represents a wealthy relationship with your money, while an empty purse symbolizes an unwealthly lifestyle.  Deborah even took the time to break down different types of purses and while there are too many to name, I must share the one I see most often which is the “The Counterfeit Purse.” She uses this term to symbolize a bag that some “may carry, who might dress fashionably and drive a nice car but have nothing of real value. Like counterfeit purses sold on the streets, these bags might look great at first glance, but they won’t hold up.” And that powerful mouthful is just in the introduction!

10 Lies That Keep You In Debt - Part 1

We all have those lies, large and small, we tell ourselves to justify why we do the things that we do. The reality is, however, that every single decision we make is either helping us or hurting us. There really isn’t much gray area there. Whether we choose to acknowledge it or not now, really doesn’t matter. Our long-term financial standing will inevitably show us what we found important during our short-term decision making.

Take a look at the list and see if you can relate to any of the lies below.

1. I deserve it.

Do you work hard? . . . Of course you do. Do you deserve to indulge every once in awhile?. . . Eh, maybe.  The question is, however, whether a new dress is really worth you staying in debt? Sometimes you may need to ask yourself, “As much as I deserve _________, don’t I deserve to be debt free even more?” If you answer, "No. I deserve to work my entire adult life and still end up with nothing at the age of retirement," then continue on. Buy all the dresses you want! Remember, its not the one "I deserve it." conversation that does it either; Its the constant conversation you begin to justify on an ongoing basis that hurts you. 

2. But, this is an emergency. . . isn’t it?

So, let’s get clear about what emergencies are. Merriam-Webster defines the term emergency as “A serious, unexpected, and often dangerous situation requiring immediate action.” With that being said, dipping into your emergency (or, opportunity) fund for items that you were fully aware were coming up is NOT an emergency. It’s important to make every expense a line item on your budget, even those things that are quarterly or annual expenditures such as car registration or dues.

Related Post: How to Create Wealthy Habits - Part 1

3. It was on sale.

Oh, yea! We’ve all fallen for this one at one time or another. The reality is most people are in debt because of STUFF. It’s impossible to get out of debt if you are committed to buying more and more stuff instead of truly being financially free. 

One way to avoid this trap is to stop walking around the mall and “window shopping” or “surfing” on line. I would also suggest unsubscribing to all of the tempting emails with the “great deals” in your e-mail box each morning. Instead of convincing yourself that you’re saving, begin to ask yourself, “Do I really need this?” Remember that buying something you don’t need is never better than saving money for your actual needs.

Do Men Really Manage Money Better?

This month’s issue of Black Enterprise features a new series on women and money entitled “Think like a woman . . .  manage your money like a man.” For obvious reasons, I couldn’t wait to sit down and read what revelations it would share.

The article states that “when it comes to finances women often wind up with the short end of the stick, whether the issue is salary, investing, big-ticket purchases, or family finances.” It goes on to say, “Often taken advantage of financially, women find themselves paying higher fees for products and services, earning less than their male counterparts and unable to support themselves through retirement.”  

I’m not trying to start a gender war on Valentine’s Day or anything, but by these statements alone is it really fair to assert that men “manage” money better?

For starters, if women’s earnings average out to be just 78% of male earning for identical positions, doesn’t that alone mean that if you make more, uh, you should end up with more? I’m not sure that this has anything to do with “management skills.”  Sure, women could stand to be more aggressive in the negotiation process, but this seems to me more like some tomfoolery going on in the human resources department. I may be too idealistic, but what happened to “Equal pay for equal work?” 

Related Post: Do “MeanGirls” Make More Money?

3 Questions to Ask Your Honey About Money

We all want it. We all need it. But for one reason or another, most of us find it difficult to talk about money – especially when the conversation involves our significant other. No matter how hard the talk is to have, the reality is that you can’t create a truly great relationship until you can openly communicate about money.

Think about dating relationships. Money is the one subject people will lie about most. People tend to stretch the truth a bit when it comes down to talking about the dollar.  They do all kinds of things to influence how others perceive their finances. While some conceal their money so they can be certain they’re not being used, others spend money they don’t have trying to impress the object of their affection. This may work out with surface level interaction, but when dating becomes a full blown relationship, it’s time to get real. . . . And, here are a few questions to help you get there:

1. “How did your parents handle money?”

We all have a financial blueprint; the way we specifically interact with our money. For most of us, our financial blueprint was handed down to us by our parents almost like a strand of DNA. But, it’s important to remember that no one is born with a particular attitude towards money.  We were all taught how to act and think about money matters.  These conscious and subconscious beliefs, ideals, thoughts and actions are what create our financial blueprint.

Talk to each other about what you heard about money and what types of behaviors you witnessed regarding money and financial matters. Once you can understand the environment a person grew up in or the way their parents or other influential people in their life handled money, it’s easier and much less frustrating to understand a person’s money style.

Related Post: 5 Signs You're Dating a Deadbeat

2. “What does money really mean to you?”

When it comes to our relationships, money is NOT the issue that many seem to believe it is. Money, that little green piece of paper in your wallet, in and of itself is powerless. It’s actually what the money represents to two different individuals that becomes problematic.

Money represents different things to different people. Money and material items might equate to love and affection for some.  For others, it could represent the difference between control and dependency or safety and stability.  If a person was brought up in a family, where expensive presents were given as a sign of love and affection, they might expect to get the same treatment from a partner even as an adult. But suppose their partner was raised to believe that working hard, saving money and providing a stable home environment meant love and affection?  These are where two people who may mean well, can often bump heads.