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.
3. Simplicity - The more complicated you make the budgeting process, the less likely you will be willing to stick with it. Your budget should fit where you are at this stage in your life. Forget what your married girlfriend with three kids is using. Yours may not need to be as intense. Just list what directly deals with your situation and eliminate any additional fluff.
4. Flexibility - The budgeting process is designed to be flexible. You should recognize up front that your budget will change from month to month, and will require monthly review. For example, if you go over in one category, then it should be accounted for next month or greater efforts should be made to prevent it. Remember if you must increase in an area, then some other area must decrease. At no time can you have more going out then coming in. If you want to spend more, figure out a way to earn more. Don’t get frustrated; its basic math.
Like everything else with personal finance, being able to actually implement the tools you learn comes down to the mindset you have around the topic. Once you begin to understand that budget is not the new "b-word," and master your thoughts and attitude around the process, you'll begin to find the success you're looking for!
This post is part of Women’s Money Week 2012. For more posts about BUDGETING, see Budgeting Roundup.
Until Next Time,
Seek Wisdom, Find Wealth & Be Blessed!