Drafting a budget is a wonderful first step, but far too often that’s where it ends. Let’s face it, a budget template is basically a Google search away. Your issue is figuring out how to stay consistent.
Many people give up on using a budget because the one they’ve created is too rigid, intimidating, complicated, and restrictive.
Don’t download any fancy spreadsheets yet. Here are four things people don’t tell you about budgets:
1. Mindset: First and foremost, your mindset toward creating a budget must be healthy. If you think that budgets stink, then guess what? Your budgeting experience is likely going to stink! I usually have clients call their budgets something like “Prosperity Plan,” or “Wealth Building Map.” The title doesn’t matter as long as it gets you excited about creating wealthy habits and managing your money wisely.
2. Intention: A budget should focus on a goal you’d like to achieve within a specified time period. Having a goal in mind will help you live more intentionally when your discipline begins to wane and the process feels more like deprivation. Once using your budget helps you obtain a goal, set another one. Never become complacent. There is always a goal you can be striving toward. Always keep your intention at the forefront of your mind.
3. Simplicity: The more complicated you make the budgeting process, the less likely you’ll be to stick with it. Your budget should fit where you are at this stage in your life. Forget what your married girlfriend with three kids is using. Yours may not need to be as intense. Just list what directly deals with your situation; eliminate any additional fluff.
4. Flexibility: The budgeting process is designed to be flexible. Your budget will change from month to month and will require monthly review. For example, if you go over in one category, then it should be accounted for next month or greater efforts should be made to prevent it. I’m traveling a lot in November so I’ll have to make some adjustments in my budget for October and December. Remember, if you must increase in one area, then some other area must decrease. At no time can you have more going out than you have coming in. If you want to spend more money, figure out a way to earn more money. Don’t get frustrated — it’s basic math.
Like everything else in personal finance, being able to implement the tools you learn comes down to the mindset you have and your intentions. Once you master your thoughts and attitude around the process, you’ll begin to find the success you’re looking for. Or better yet, success will come looking for you.
Patrice C. Washington is the Wisdom & Wealth Money Maven and author of the series, Real Money Answers. Follow her on Twitter at @SeekWisdomPCW for practical tips on wisdom, wealth & business. If you or someone you love is a professional woman that feels overwhelmed, overworked, underpaid, undervalued or unfulfilled, visit www.PatriceWashington.com for info on private coaching and compelling client testimonials.