So, I started to make grand plans to create a multi-part series on how to budget, tricks and tips… but then I realized I didn’t address the why or the mindset behind budgeting.
At the risk of sounding like a bad acting coach, what is your motivation? Budgets are a lot like flossing. You know it’s a good thing to do, but you have a be motivated by something to be consistent day in, day out.
One way to help stay motivated us to think about what goal(s) do you hope to accomplish by having a budget. Do you want to get out of debt? Save for a house or your child’s education? Build an emergency fund? These things won’t happen with magic pixie dust. Hoping that Jesus comes back before AMEX is due is also not a viable plan. And those who marry for money usually end up paying for it.
My why is simple – I don’t want to be broke. While I definitely had enough to eat, growing up there was no room for extras like ballet classes or summer camps. I didn’t want to live paycheck to paycheck, but I certainly didn’t want to blow my hard earned money on meaningless stuff. I wanted to pay off my school loans and have a emergency fund big enough to carry me through a rainy day. And the occasional trip wouldn’t hurt. Having these goals help me to stay focused on where I want my money to go instead of looking up at the end of the month and wondering where all my money went.
What about you? What are your 2-3 goals you hope to accomplish with a budget? Write them down. Put them in your wallet by your credit card if needed so that you can remain vigilant in sticking to your goals.
Now that you have your why, you need to have to right mindset to carry them through. For example, you may have a good reason for saving, but if you don’t believe that you can accomplish your goals it will become a self-fulfilling prophecy. There are some mindsets we have to get rid of in order to accomplish our financial goals:
False Mindset #1: Budgets aren’t fun
Repeat after me: budgets lead to freedom, not deprivation. On the surface, budgets can feel restricting. You’re not “free” to spend your money on anything your heart desires. However, all of that “free” spending ended up costing you something, didn’t it? That freedom really led you to become a slave to your debt.
Budgets put you back into control. Instead of your money being spoken for, you tell your dollars where to go. Yes, as you work to pull yourself out of debt, you might not be able to buy what you want right now. But having a budget doesn’t mean that you can’t have any fun. In fact, I encourage you to have a category for fun/entertainment/hobbies or the like. You just have to allocate funds to your fun.
False Mindset #2: I can’t afford to budget
Frankly, most of us can’t afford not having a budget. I know things seems tight now, but having a budget can relieve some of that stress. By taking a hard look at the numbers you might find wiggle room you didn’t realized existed.
Again, budgets put you back into control. You go from reacting to situations to being proactive. For example, instead of freaking out if your car needs new break pads, because you’ve set aside some money in your emergency fund you can pay for it without setting your finances back.
Finally, remember that something is better than nothing. For some of us, saving $5 or 10 a week all you can do. That’s better than $0. Get encouragement from Theodore Roosevelt: “Do what you can, with what you have, where you are.” Allow the progress to build upon itself and you see your savings grow bit by bit.
Instead of these false mindsets, arm yourself with positive, yet realistic ones. If you have debt, you didn’t acquire it overnight. Therefore it will take some time to get out of it. If you want to save for a goal, it will also take time. But one of my favorite scriptures regarding finances is Proverbs 14:23 (NIV) “All hard work brings a profit, but mere talk leads only to poverty.” Don’t just talk about getting your finances in order, do something about it. It may be a long journey and there may be set backs, but keep at it. It will yield a profit.
What about you? What mindsets help you stick to your budget? Leave a comment below.