Last month I wrote about “SIMPLIFYING YOUR LIFE” as the FIRST of the FIVE key ingredients to Financial Peace and the recipe that I find most useful to get there. To recap here’s the Full list of the 5 KEY Ingredients once again: (I believe in repetition!)
- Simplifying your Life
- Eliminating Your Debt
This month I want to focus on budgeting and why this is such an important part of the recipe. Many of my clients seem a bit deflated once they have mastered their monthly budget planning with me and then I add “And now you will do this for the rest of your life.’ WHAT?!? “WHY they ask? Once we start getting our spending under control, why would we have to continue to do this?” It’s simple!
Budgeting is the strategy to winning with your money!
Whether you are sitting down for the first time to try to lay out a plan to get out of debt or whether you are ready to build your retirement nest egg, the BUDGET is the strategy to use. You see its proven. Those who plan, WIN with money. Those who don’t plan, don’t win with money. Businesses who plan and forecast are healthier than those that don’t. One of my favorite Dave Ramsey lines from Financial Peace University is “If YOU were running the company called You, Inc today the way you handle your personal finances, would you fire You?” (Hmmm?) I know in my early 20’s when I was buried in credit card debt and owing many of those cash advance loan companies that kept sending me those ‘cash today for a low monthly payment’ checks, I was NOT running ME, Inc with ANY financial methods at all. I was running on an emotional high as a girl in my early 20’s thinking ‘Look at me, l’ve moved out, have a shiny new car, my own apartment, AND I can have all this “other” stuff, because someone thinks I’m adult enough to hand me credit.” The “other stuff” was a new gas grill, appliances, leather furniture, a sweet waterbed, and of course a vacation from the stress of having TOO MANY monthly payments. It took me getting back to the basics of what my mother taught me, balancing the household checkbook at 10 years old, to see that the reason I was stressed out was that I didn’t have enough money. You see, the budget reveals some tough truths when we don’t have enough coming in and helps reveal some amazing truths when we do but we just keep spending it all. It will work to your advantage if you start learning to tell your money where it’s going, before it shows up each month. I have many clients today that prior to budgeting monthly, had no idea where their extra paychecks went twice a year. When the tax return arrived it was spent on paying off the Christmas gifts that went on a credit card, an auto repair, something for the house or to fund their vacation, because there wasn’t any savings or vacation fund to hit up.
The budget does more than just sort out what will happen when. It’s helps you have the plan to work the plan. As a Dave Ramsey Trained Independent Financial Coach, I help people move through the “7 Baby Steps to Financial Peace“. Whether they are on Step One (save $1000), Step Two (pay off all of your non-mortgage debt smallest to largest), or Step Six (paying off the principal of your home mortgage early) KNOWING what is available each and every month to make your STEP WORK happen is imperative. It’s truly the most important ingredient as you are building the entire recipe.
If you want to learn how to cook, you watch the Food Network or pull out a cookbook. If you want to learn more about HOW to budget & WHY to budget (there are SO many benefits) you can take one of my online budget webinars this month and in just one hour, in the privacy of your own home, learn how to start winning with your money.
See you next time, when we look at ingredient #3 ELIMINATING YOUR DEBT!