Why Are You Here?
If you are reading this then you are probably at the very beginning of learning about personal finances and budgeting.
There is no better time than now to start learning about how to take control of your finances and get yourself on the road to having more financial freedom!
The truth is that most people have a very hard time dealing with money. A lot of folks out there simply did not have a good role model growing up able to teach them about money. For a long time this subject was even a bit taboo to talk about as a family and certainly out in the open with other people! Can you imagine those days?
The good news is that now there is a ton of information available to you and not only is this a judgement free zone when it comes to your personal finances you’ll find that I often share my own experiences with obstacles, bad behaviors and more. The end result is that we all get better with our finances and live a less stressful life!
The Importance of Planning
I learned a long time ago that in order to understand what was actually worth devoting time and effort to accomplish required some planning on my part. Planning in this case doesn’t require anything fancy. You can sit down with a sheet of paper and simply write out what it is you want to accomplish with your money and specifically why it is you want to budget. Here are some examples:
- Spend less money
- Find out where I am spending my money
- Learn how to save money
- Plan and save for future vacations
The list could go on and on, but the important thing is that you have some type of “Why?” answered here. Budgeting itself is actually quite easy once you find a system that works; it’s the execution and drive that usually complicates things.
So why do you want to write this stuff down?
Written money goals get done MUCH more often
It has been proven time and time again that writing your goals down will dramatically increase the chances that they will be accomplished. Don’t believe me? One of my favorite bloggers, Michael Hyatt, dives into why you should commit your goals to writing here and I suggest you check it out.
Personally, I’ve found that this activity really works for me. If I write something down and especially if I have it posted up somewhere that I will see it often it creates the positive reinforcement that I need to keep focused on the goals.
One great thing about setting a budgeting goal is that you are often dealing with money Every. Single. Day.
What better way to keep your goal in front of you??
Planning allows you to look AHEAD for upcoming hurdles
Imagine that you are a pro hurdler (is that a thing?). On a bright, sunny day you’ll be able to clearly see all of the hurdles up ahead and be able to plan accordingly how you are going to handle jumping over them. You’ll be able to plant your feet correctly, change your pace, and whatever else it is that hurdlers do to make sure that they don’t trip (magic?)
Now imagine now that you are the same hurdler, but this time you are extremely near-sighted and you’ve forgotten your glasses. Suddenly those hurdles are popping up out of nowhere and you have milliseconds to react. Your feet are in the wrong place, you’re jumping too early, and it’s a disaster.
Obviously this example is a little simplistic, but this is exactly how you are living your life if you aren’t budgeting and planning for the future. You’ve got blinders on and you are being forced to react to obstacles and stay in a state of hyper vigilance.
That’s not healthy.
How Budgeting Fits into the Plan
Budgeting fits into this plan by acting as a way to group information about your finances into one place and serve as an accurate account of what is happening with your money. Take a look at this list and ask yourself if this happens to you more than you would like to admit.
- Forgetting about upcoming bills
- Forgetting about spending that causes you to overdraft
- Not having money ready for Christmas presents
- A “sudden” expense like new car tires force you to use the credit card
- Major purchases and vacations seem impossible without credit cards
Again, this list could go on and on. The point is that all of these things are symptoms of short-sighted finances. Having a budget will force you to look at every dollar you have coming in and ask yourself where it is going and whether or not you can actually afford it. It will also allow you to look months or even years ahead in order to tackle financial hurdles far in advance.
Budgeting forces some accountability
I know that for some people accountability is a four letter word, but there is really nothing more important when dealing with personal finance.
Think about the term “personal finance”.
It’s not your friend’s finances, it’s not your mama’s finances, it’s yours. You’ve got to take some ownership and admit that if you can’t be accountable to yourself you’ll never be accountable to anything. I encourage everyone to find a system of budgeting that works for you and to really take it seriously. You’ll find over time that having a certain amount of discipline and planning are the keys that you’ve always been lacking.
I’ll be adding additional resources about budgeting and planning here in the near future, but let me know in the comments what you are struggling with now that I can help you tackle! You are almost certainly not alone in your struggle and others will benefit from your question!