Income Planning: Budget Challenge

Many of us think that we are good stewards of our money. We often think that each purchase is something we need, when in reality it is only something we want. When I was younger I thought I was a great steward of my money. At that time I was living hand to mouth, as most young people do when they are just getting started. It seemed I didn’t have enough money at the end of the month to save. Then I met a very successful gentleman who made a huge difference on my life. He suggested I do the following:

“Account for every penny you spend for one month. Write it down. Weather it is a pack of gum, your electricity bill, new clothes or a cup of coffee. Write it down. At the end of the month you will have a very accurate depiction of where every penny went. You may be surprised to see where some of your money is going.”

I took his advice and did exactly that. I was astonished to see how much money I was wasting on trivial items, such as gum, coffee or other seemingly little purchases. Armed with that information, the following month every time I had the urge to buy that pack of gum, I thought about what the numbers meant. If I didn’t buy it, I would take the money I would have spent on it and put it in a jar. Voila! I had found a way to somewhat painlessly save some money. Even on a meager income at that time I was able to save $100 that first month. This totally changed my thinking moving forward. Like I tell my wife “every dollar we don’t spend today on trinkets, is three dollars we will have later to pursue our goals.”

Another budgeting tip that I have found useful is once you have paid off anything, continue to put that money towards the next thing that needs to be paid off. Once everything is paid off make all of those same payments to yourself. You have already budgeted that amount of money, why not continue to use it to fund your retirement?

One last thing to keep in mind when it comes to almost anything… If you goof up, start again next Monday, or the Monday after, and if you still goof up, make it the next Monday. Don’t be too hard on yourself, just be honest with yourself. Remember the 11th commandment: “Thou shall not fake thyself out.”

If you need some coaching on what to do with your jar full of money, give us a call. We are always happy to help.

↑ Grab this Headline Animator