In this day and age of threatened recessions and devalued dollars, we often fall into our survival modes instead of hopping into our “thrival” gear. We seem to focus on what we can’t do instead of what we need to do or what we can do. We forget that the way “out” of peril is through a well developed plan and consistent follow through.
It’s not about what we want that we can’t have and it’s not about reacting to all the “crap” life throws our way. It’s about doing what we need to do, to get to where we want to be. It’s about the bottom line of our integrity and our character. It’s about style. It’s about grace. It’s about taking responsibility for our own lives without the “whine” and doing something about our own “condition”. If you believe this, then you may just be ready for the rest of what I have to say.
One of the first things a person must do when they find themselves in a HOLE is to STOP digging. I know, that sounds simple but it is more difficult than it sounds. One often finds a shovel in one hand and a bucket of crap in the other. Not knowing what to do next, one just sits down in the bucket of crap… So what is the next real step?
The next step is to develop a plan and in this day and age the foundation of that plan is a workable budget. Yes, you heard me correctly, a budget… Now don’t get your tail all knotted up and don’t tell me you don’t make enough money to have a budget. A budget is simply a plan to spend your money and organize your life... It doesn’t matter if you have a lot of money or if you have just a little. You can even budget your time….. It just is a method to put you in control of YOU. The only thing you can’t budget is “other people”.
Ok, so you’ve tried it before and failed. Well, maybe that was because it was someone else’s budget; someone else’s plan for you. Remember, you can’t budget someone else's time or money and someone else’s budget will not work for YOU. As with most everything else, your budget needs to be personalized for YOU and it starts by assessing what money YOU have to work with each month. No, not a projection of what could be but an honest projection of what is.
So what’s the first step? You’re right… Write down how much money you take in every month. This is what many in the financial market call an “accurate income projection”. I call it looking at your pay stub and writing it down. After you have successfully accomplished this, you need to develop categories that actually fit your own situation. Categories that accurately reflect your own spending habits, not some projection someone got out of a book someplace, somewhere in time.
Next, you have to fine tune these categories so they give you a meaningful picture of what is happening to your money. Where does it all go? Is there any place you feel you can cut some corners or cuts costs? Now don’t get too carried away with detail or you will quickly give it all up. It will become a chore instead of a tool and a chore you will quickly tire of.
Now that you have identified what happens to your money, it’s time to look at expenditures that seem to just come up and slap you along side of the head, like car maintenance, insurance and taxes. You get my point. Things that you know are going to be there but you really don’t plan for and they seem to take you by surprise all the time.
Once this is accomplished, you have to review these categories on a regular basis and determine if they are meeting your needs. Do you need to add more categories or do you need to take some categories away? This is the time to review your expenses and look at ways to trim costs in each category... Remember, you are looking at categories instead of money and seeing what money you have will fit what categories….
After you have completed this, you may find that one category you haven’t addressed is “cash”. Cash disappears very quickly and is not easily tracked. So what does this mean? Yes, you need to write everything down, how much and what it was. Remember your budget isn’t there to tell you what not to do, it is there to help YOU track what YOU are doing and what YOU need to do to make things work for YOUR goals and YOUR future.
A category many forget or feel just isn’t necessary is “savings”. This just isn’t true. You need a line item for savings and you need to adjust payment in the same manner as you would a monthly bill by a creditor.
Last but not least is something most of us never do. This is writing realistic goals for yourself. This is what the whole budget is about. It’s not about tracking what you spend as much as it is setting financial goals that will enable you to buy a house, purchase a new car, go on vacation, retire at 55, get married or have money for your children’s education. Without direction and needs, a budget is just a restriction and we fight it as such.
A budget gives you awareness and it gives you freedom. It puts YOU in control of YOU. It lets you know what you have to do. It gives you the method to reach your dreams and it gives you security. It also identifies patterns you may not have been aware of before and that can be easily adjusted or taken care of once they are identified. It’s a tool that allows you to take active responsibility for your life, as it increases internal motivation and helps create a positive attitude.
Now that you have a Personalized Budget and you are driving your finances rather than them driving you; how do you go from survive to thrive? I know, it has been sink or swim for some time but as we have come to understand these past few weeks, it doesn’t have to be. Here are four surefire activities to get you on the right financial track. 1) Save more, 2) spend less, 3) shop smarter, 4) find alternative methods to increase your income and reduce expenditures. These are just a few, but they are a GREAT beginning.
Questions to ask yourself? Do you have three to six months wages set a side for the unexpected? No? Well now is the time to get serious and save whenever you can. Now is the time to eliminate unnecessary purchases. Is that HD channel really worth the 60-100 dollars a month? In times when money is tight, don’t spend more than you have to and look at ways to save on all necessary purchases. Most important, pay down your debt. In times of recession, interest rates tend to go down. Your debt will cost you less and your repayment money will go further. It’s not the time to borrow more and go deeper into debt. Borrowing more just makes the “hole” deeper. Remember the “hole” theory? When you find yourself in a hole what must you do? Yes, STOP digging! Start with credit card debt first because it is soooooooo outrageous and most dangerous.
Last but not least is to make the most out of what you have. Squeeze more out of life and everything you own. Budgets don’t have to squeeze you but they can help you make the most of everything you have and put you on the “right” track to meeting both your personal and financial goals. Go a head; give it a try for six months. Heck, you can do anything for six months other than hold your breath and you have probably been trying to do that. I believe you will find that once you get your head out of the sand, life will stop kicking you in the ass. No, don’t take my word for it. Take your own. Give it a try. What have you to lose, ignorance?
By now, even if you are new to these writing you know it is all about choice, your choice. I’ve already made mine. Don’t you think it’s time to make yours?
Until next week then, let’s hope “cranial rectal inversions” are just a thing of the past. “Ride with a tight cinch and keep your powder dry.”