It’s enough to make a grown man (or woman) cry. That dreaded word when it comes to your finances.
Why is it that a simple word, which involves a simple process, can have such a devastating effect on people?
I know that I’m probably the exception to the rule and I love fiddling with numbers (hence being an accountant!), but really, all a budget is doing is identifying your values and priorities in life and spending accordingly.
And therein lies the crunch.
We don’t always spend in line with our values or our priorities, and rather than deal with the shame of, yet again, having veered off track, we ignore our finances, hoping that someone, somewhere will sort them out sometime, and we will have enough money when we need it.
Part of being financially empowered is being prepared to deal with your finances. In the decisions you make with where you money goes, and then making sure that that is where it does go!
Have an attitude of love towards your money. Feeling resentful is no way to attract more money to you. Be grateful for what you DO have and you’ll attract more money to you! Simple Law of Attraction in action.
So how do you go about making a budget that is fun, easy AND in line with your values and priorities?
1. Determine what your values and priorities are.
Sounds pretty obvious, I know. But have you taken the time to really determine what you want in life? If you take a look at your bank statements you’ll find out what your current values and priorities are, but is that REALLY what you want? Probably not, or you wouldn’t be having money issues!
Take some time out and determine what excites you and what you enjoy doing.
Look for the good in expenses that you “have” to pay for – electricity (WOW – can you imagine life without electricity? I’m sure one day we’ll be using something else, but in the meantime …!), car repayments (is your car reliable? is it cost effective? is it what you want?). There is always something to be grateful for with what we pay.
2. Determine what your income is.
Again, another one that seems pretty obvious, but you’d be surprised how some people have no idea how much they earn!
And I have seen people spend in accordance with their gross income (ie before tax is taken out) … no surprise that they ended up in trouble.
Some people have variable income due to earning commissions. Determine what your average income is.
3. Evaluate your current spending.
Take the time to look through your current bank statements and for each expense feel into how you feel about spending money on that. If it makes you feel warm and fuzzy, check that it fits in with what you determined your values and priorities in #1 are.
If it makes you feel ill thinking about having spent that money, decide whether you want to continue spending money in that area.
My downfall is courses. I LOVE studying and learning more, but I overestimate how much I can actually do at once and I end up only doing half the course before moving on. I’ve made the conscious decision now of NO MORE!
Where do you need to make cuts?
4. Make a budget.
In fact, now that you’re getting down and dirty, I’m going to suggest you make three budgets!
Yes – three budgets.
I haven’t gone totally mad.
You know those months when you have unexpected bills appear out of nowhere? For those months you need to have a “Low” budget – trim the fat from your spending, deduct the non-essentials, and give yourself the space to meet these additional expenses without getting further into debt.
This isn’t a “forever and ever” budget. That never works. You end up feeling deprived. If you know you only have to be stringent for a month or two, it feels manageable. There is a light at the end of the tunnel.
Stay upbeat during this time, work on your money mindset, practise your affirmations.
Look at ways you can increase your income during this period to assist with cashflow. Can you declutter and sell items on eBay, or similar, and create space in your life?
Challenge yourself with having as many “spend free” days as possible. Reward yourself with stars! Have fun with the challenge. They you’ll know what you can really do when the going gets tough.
The second budget is your “Medium” budget and is based on your normal income coming in. Take into account savings and make sure that you prioritise your spending. Create a buffer that can help you next time you have an unexpected bill. Put money aside for those dreams you want to live.
The last budget is the “High” budget and is the most fun. This is where you look at how you really want to be living. Create a vision board for your expenses so you can inspire yourself to increase your income for the additional expenses. You want to be inspired to attract that additional money. If you don’t generate those feel good feelings, you’re not going to take action towards your big dreams. Be specific with what you want. Give every dollar you earn a job to do!
5. Make a regular financial date
How often should you review your finances? Track your income and your bank balance daily, and I believe you should be looking at your expenses at least weekly. Anything longer than that and things can all too easily fall pear-shaped. It’s a lot easier to catch things when you’re looking at the numbers regularly and adjust your plans.
And this doesn’t have to be something heavy. Make it fun. Enjoy a glass of wine or soothing camomile tea while you review your numbers.
The more confident you get with your numbers, the more empowered you can become and the better financial decisions you can make!
Don’t let the fear of budgeting put your off from doing something that will help you create the life of your dreams.
Money is too important a part of our lives to be ignored.
Making a budget is a living process. Work with it and enjoy the success of attaining your dreams by spending your money wisely and mindfully.
Share with us below your budgeting insights!