As I work with clients to help them make the most of their money, get out of debt and get onto a path towards Financial Freedom, the first step is to come up with a plan which includes creating a budget. A budget helps you understand how much money is coming in and where your money is going every month. Once you understand this, you will understand your money like never before!
Even though budgeting is a big part of Financial Freedom, there is usually one common obstacle that keeps people from doing it. Perception.
How your perception can be an obstacle to budgeting
The main issue here is that you just can’t get motivated to start budgeting because you don’t have a big enough WHY. A lot of times when I start working with someone, they look at budgeting as not effective and not worth the effort so they say WHY should I do it? Their perception is that it is not worth their time when in reality all data shows that those who win with money use a budget.
Here are two clues that your perception could be keeping you from budgeting.
You have no interest.
When it comes to managing your money you are really not that concerned. You are not against the idea of budgeting but you are not motivated to do it because you lack concern, excitement or passion because you just don’t see the point.
You know you need to create that first budget but you are constantly putting it off until tomorrow. Maybe you say “I have never been good at math” or “our income varies so it is hard to budget” so you don’t take that first step. The reality is that budgeting is simple math and there are good techniques to account for variable income.
So how do you overcome the perception obstacle? You change your perception by finding your WHY. And you find your WHY by looking at how budgeting impacts the different areas of your life.
Over and over again, I have worked with people that once they started budgeting it felt like they got a pay raise. People who learn to budget will, on average, have a turn over of $8,000 in the first 90 days. This represents a $5,300 reduction in debt and $2,700 saved. Studies also show people spend 15% more money when they pay with a credit card instead of cash. A budget helps you Identify budget categories where you tend to overspend. You can then make a cash withdrawal for those areas and when it’s gone, it’s gone!
Your spirit changes and you have peace when you have a plan. Most of the time we experience fear when it comes to our finances because of the unknowns. Once you are able to get everything spelled out in a budget you understand your money better. You will probably find out there is work to do, but now that you fully understand the situation it is no longer an unknown and you will have more peace as it relates to your financial situation.
Doing a budget together with a spouse forces communication and can increase the quality of the relationship. In the financial classes I teach at my church, I see couples enter the class who have not spent a whole lot of time talking about money and their financial situation. This has caused a lot of stress to their family and marriage. However, once they stop ignoring the situation and start talking about their money and working on their plan together it begins to change their marriage. They now have a common goal and are working together to accomplish it.
You feel better when things are organized and in place. Kind of like that feeling you get when you spend time cleaning out the garage. Once everything is organized and in its place, you just feel better. Same thing with your finances. Once you start budgeting, get organized and on a plan you just feel better and have emotional peace.
So, how is your perception when it comes to budgeting? If you need some help changing your perception I have a program that can do just that. If you are interested, schedule a FREE 15-minute call and let’s set up a time to talk and see if we can find your WHY when it comes to budgeting.
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