If you’ve ever wondered how important budgeting might be, to what I like to call financial wellness…
It’s a huge component of becoming financially secure, planning your future, and knowing whether or not you’re on track.
It has a lot to do with your actual comfort level around your finances.
Think of it this way: if you’ve got a low comfort level when dealing with your personal finances, you probably also have a few bad habits that keep creeping back in, sabotaging your progress.
Over the years, what I’ve seen is that this only gets more complicated with married couples and partners who share the household finances.
This can lead to shame, secrets, or guilt embedded in this area, thereby adding even more stress to an already vicious circle!
In fact, finances are the number three cause of divorce in America!
How to Look Into Your Crystal Ball: Reduce Uncertainty, Stress & Conflict
I’m a huge proponent of doing a little proactive work now…
To save yourself the headache, stress, and anxiety of wondering whether you’ll have enough money long term, or when your savings might run out.
The key here is looking forward into the future – determine your monthly fixed costs. Forecast for a little wiggle room, in case of unexpected events. Give yourself a little extra for the fun stuff!
This takes the drag out of planning your finances and creating a budget.
Change Your Mind! A Budget Should NOT Be About “Cutting Back”
I think the biggest thing that trips people up about the ugly “budgeting” conversation… is their mindset and vocabulary around it.
Most people think a budget is like dieting – eating boring, cardboard-flavored food for months, to get in shape and hating every second of the process.
But this is not what setting a budget should be like at all.
Instead, look for what you can remove that doesn’t bring more pleasure to your life. Seek out what you can readjust that will make the whole process more fun.
You really can start to enjoy spending your money responsibly!
A pro tip here is to remember to account for those expenses that may come every other month, or biannually (like insurance)!
This will ensure you’ve got extra cash accumulated (again planning ahead) so you won’t be taken by surprise and scrambling for the rest of the month.
Even High Income Earners Need Budgets & A Financial Plan
It really doesn’t matter where you are in life in terms of net worth, cash flow, and income…
I cannot think of a single scenario where someone wouldn’t benefit from having a financial plan.
In fact, I remember fresh out of college in ’85, when I just got my degree in finance and was studying for the CFP® certification.
In one of my required classes on budgeting, I remember going through each line of what people typically spent their money on, and I remember thinking to myself…
“Very wealthy and high-income individuals probably see no point or benefit in this stuff…”
But I was dead wrong.
These are the exact types of people who value this stuff the most!
Oftentimes, they’ve got so much income coming in from investments, jobs, and businesses, yet they lose track of it maintaining their houses, cars, and toys.
After paying sky high taxes, their remaining income is pulled in so many spending directions, that they don’t even know where it’s all going! This goes for people at the six and seven figure levels of income, too.
This shocked me.
And that’s exactly why I advocate everyone get a handle on where their money’s going! It’s that crucial.
Conclusion to Budgeting: The Key Is Proactive Organization
Setting up your budget doesn’t have to be hard. And it needn’t be stressful either! I know a couple who schedule time each Sunday night together to open a bottle of wine and update their budget.
It’s more about being proactive, getting in the game, and adapting to a style, process or system that works for you.
For certain people, software, spreadsheets, and getting deep into the numbers is the best approach. For others, reading that last sentence made them cringe!
This is a personal journey, and one that should be handled with unique care and special support, so you can maximize your results, and enjoy your lifestyle.
If you’re struggling with this topic of financial wellness, I invite you to drop me a line, and discover how I can help you put your best foot forward with this.
Click this link here to get in touch, and I look forward to speaking with you!