What is really important to you, and why?
How will you get or protect what is important to you?
What do you most want to accomplish…and why haven’t you accomplished it?
How will you accomplish what you want to accomplish?
For many of us, one of the big reasons we don’t have or haven’t accomplished something is money, or lack of it. The Bible warns us that the love of money, or placing too high of a priority on having money for no other purpose than having money, is a root of all kinds of evil (I Timothy 6:10), but money in and of itself is neither good nor bad. It’s just a tool that can be used for good or bad purposes.
Could you skip a paycheck if you had to?
Exactly how long could you go without income?
How can you take care of your family or friends if you can’t take care of yourself?
Most of us have some vague idea that we should have a budget. It sounds so grown-up and responsible. It can also sound like it would be restrictive and no fun to live on one. But is it fun to open a bill and not have the money to pay it? Is it fun to run out of money a few days before the next payday? Is it fun to pay the minimum on your credit card every month but watch the balance slowly creep higher because you needed something before payday…again?
Wondering How to Budget?
Even if you’ve bought in to the idea that you should live on a budget, you need to do a few things before you begin to create one.
- You need to know exactly why living on a budget is important.
- If you’re married, you need to agree with your spouse on why living on a budget is important.
- You need to set up reminders about what is important.
- You need an accountability partner.
You must know WHY
Even if you (and your spouse, if you’re married) think budgeting sounds good in theory, and even if you (and your spouse, if you’re married) write out a beautifully balanced budget, life is going to happen. Something will break and need fixing. You’ll be invited to go someplace or do something that costs money you don’t have. There will be a sale on that thing you’ve been wanting forever (or since you saw it on sale, either way). It happens.
Then you will have a choice. Are you going to stick to your budget?
Having a budget means nothing if you don’t stick to the plan and live by those numbers you wrote down. If you just think a budget is a nice idea and something that you should probably do, you won’t stick to it. You’ll fix or go or spend. If you understand why you want to live on a budget, maybe so you can save for a house or take a trip or send the kids to university or retire with some dignity, then you’re much more likely to give up the short-term “reward” of spending money in order to get what you really want…the house or trip or whatever.
You must SEE IT
So your first step in making a budget is to write down why you’re doing it. Don’t just think of a few vague ideas or jump on one of the priorities suggested here. Really think…”What do I want out of life? What is so important that I am willing to make sacrifices and be inconvenienced in the short term so that I can have what I want in the end?”
If you have a spouse then the two of you need to discuss it together and come up with one list. One. Remember when the minister said, “The two shall become one,” at your wedding? This is where you live those vows. What is important to the two of you? What are you going to accomplish together? You may need to make separate lists at first, talk about them, and then work together to write down one list of your common goals.
Once you have your written list of maybe 3-5 goals, make a copy and put it someplace where you can see it regularly. Lots of families put their lists on the fridge. My husband and I have our goals in our financial file. Maybe you want to tape yours to your bathroom mirror where you’ll see your goals each morning as you prepare for your day.
If you are a spender by nature then I strongly suggest you find images that represent your goals, print them out, and carry them in your wallet. Wrap a picture of your desired vacation destination around your credit card and secure it with a rubber band. Tie a graduation tassel around your car’s rear-view mirror to remind you to save for your child’s education, or maybe your own! If you can see and/or touch a symbol of your goal, you’re more likely to reach it.
You may need HELP
If you are married, your spouse may be your built-in accountability partner. When either my husband or I get in a spending mood, the other will usually be level-headed enough to step on the brakes. But if both you and your spouse are prone to impulsive spending or if you’re going it alone, you should find an accountability partner to help you.
Choose someone you trust; someone who will keep private things private but who can also see what you’re doing and call you out when you need it. Choose someone who can ask the tough questions and who will tell you the things you might not want to hear. Potential accountability partners might be your parents, a close friend, someone from your church, or an older person/couple who has “been there, done that” and can help guide you through the process. Whoever you choose, make sure it’s someone who handles money well and will give you wise advice that is in line with your goals and dreams.
So here’s your “homework” if you want to draft a budget.
1. Write down WHY you want to start living on a budget.
2. Stick a copy of the list someplace you’ll see it often.
3. Put a picture or something to symbolize your top priority in your wallet or someplace prominent.
4. Find an accountability partner.
In my next “How to Budget” post I’ll share some nuts & bolts of how to actually create your budget and assign a dollar amount to the different areas of spending you might encounter. You’ll need paper, a pencil, a calculator, and a calendar to do it. Your accuracy will improve if you also have a list of your current bills and spending, including utilities, insurance, lunch money, and so on.
Why do you want to live on a budget?
Update: I’ll be posting related articles and information on my Facebook page and Twitter feed. I’d love to have you follow me there and sign up to follow the blog using the link at the end of this post. Thanks!
The “How to Budget” series posts are:
- How to Budget: Why?
- How to Budget: How – Part 1
- How to Budget: How – Part 2
- How to Budget: Irregular Income
- How to Budget: Emergency Fund
- How to Budget: Getting Out of Debt
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