This is a guest post by Brad Chaffee from Enemy of Debt, “Where Behavior Meets Reality”, Brad motivates his readers to believe in their ability to win with money by becoming debt free. You can check out his 31 Day Manage Your Money Project, and win $100s of dollars in prizes for participating in his challenge. Please subscribe to his blog to receive motivational updates.
Let me start off by saying that I think budgeting is very misunderstood. We tend to feel squeezed, constricted, forced, and abused every time we hear the word budget. I admit that I used to feel that way too, but there was a little more to it than that. In all honesty, it was a time when I was afraid to face the truth about what our situation really looked like.
I was afraid to learn:
- How much were we spending?
- How much were we wasting?
- What our financial situation really looked like?
It was then that I realized I was afraid of answering the wrong questions. The questions I needed to be afraid of sound like this.
- How much do we have saved up?
- How much is having this debt affecting us?
- How will we pay for our kids college?
- What will retirement look like?
We realized that the last four questions were scary enough to force us into action. As opposed to the first set of questions, which only kept us from taking any action at all.
Are you asking yourself the right questions? Be honest with yourself, because that is the only way your situation will ever change. You cannot keep on doing the same things with your money, and expect the outcome to be any different. You have to do something else. That’s your only other choice.
Now that I’ve hopefully got your attention, let’s take a look at some things that will help you win with money.
7 Habits to Highly Effective Budgeting
Spend It On Paper On Purpose - You can no longer accept sitting on your hands, just watching your money walk away. You have to tell it what to do, and then make sure that it does it. Your money is like a child that doesn’t listen. We don’t just let our kids go out into the world without guidance do we? Your money should be handled the same way. You have to make it behave so that it can one day make you proud.
“Needs Vs. Wants” Awareness - So often we eagerly, but improperly, classify wants as needs, in order to make ourselves feel better about spending money. In doing so, we fail to realize the missed opportunities to save, pay off debt, and secure our future. You have to challenge yourself to be honest and true about what you’re really doing.
Teamwork and Accountability – If you’re married teamwork is absolutely essential. You have to “dream together” in order for your budget to work properly. If you are single, you have to work even harder at holding yourself accountable, because if you don’t who will?
Fight Impulse Spending – Dave Ramsey calls this “death by 1000 cuts.”, and anyone who has watched their money vanish, knows exactly what he’s talking about. Impulse spending can do more damage to your budget an unexpected emergency, because impulse purchases are so small that you barely notice. The key difference is that impulse spending is preventable.
Think Ahead – It usually takes a few months to get the hang of budgeting, but the one thing that really helped us the most, was thinking ahead in order to better prepare. Budgeting is like Chess in that it requires you to think several moves in advance. It is when you are unprepared that your budget will seem pointless. Be sure to plan ahead for those irregular expenses.
Live Debt Free – That’s right, living without debt can give you the best advantage for making sure your budget works. It gives you more of your money to do the things that are important to you. Being debt free gives you many more options each month and allows you to manage your money without all the stress.
Unwavering Determination – When it comes to budgeting this is obviously the most important. Without that inner drive and motivation to excel, your budget plan will never gain enough traction. The only other option is to go back to doing the same things that got you where you are today. We both know you deserve better than that.
Do you have what it takes to be highly effective? I think you do, but you’ll never know unless you give it a try.
Kelly’s notes: If you tuned in on Monday we had a discussion about needs vs. wants on the ¢entsible show. Melissa, from Girly Mama, even mentioned needs vs. wants when I talked about wanting to purchase Uggs after she tweeted about a 50% off sale. For me the way to stay motivated is to ask, do I really want this or would I rather be debt-free? Usually the answer is debt-free and the item gets struck from my shopping list.
How about you? Do you maintain a budget, and if so, how do you stay motivated to stick with it?