Woo hoo! Par-tay! This is likely your favorite piece of advice I’ve doled out thus far; glad I could be of service. Simply put budgets suck! When you think about a budget, if you are like me, you cringe- and then quickly distract yourself with something more enjoyable like… pretty much anything else. Budgets are restricting, they are claustrophobic, and they are definitely NOT ENJOYABLE! If you read my blog post last month (Say what…you didn’t?!? I’m giving away information that clients pay hundreds of dollars for so save yourself some money and take advantage of these freebies! No worries, just click here to read it.) you will know that how you approach something and the terminology that you use to identify it is powerful.
For example, let’s say I have a work seminar to go to and I don’t want to go, I don’t like the people that are going to be there and I am expecting it to be boring, chances are I will close myself off and I will be miserable the entire time. Same goes for the reverse, if there is a work event that I am interested in going to, where I think I might learn some new skills, and I’m curious to see what kind of characters will be there to brainstorm and network with, the probability is that I am going to enjoy myself or at very least be amused. Unfortunately, a budget is akin to that damn work seminar that you are dreading, the one you avoiding and trying to fake an illness to get out of- How odd, I feel a case of bird flu coming on?
Because of this deep negative psychological conditioning we all have associated with budgeting, I simply don’t do budgets. Instead, I plan. Just like you might plan your fun/productive/fulfilling/essential social or family engagements on monthly basis I plan my spending on a monthly basis. Once I’ve done my monthly spending plan, I check in with my plan each week just to make sure I haven’t forgotten anything, to make sure I have removed events (spending) that have been cancelled, and to double check that I haven’t overcommitted (spent more than I intended to) in any given area. Like you, sometimes I will make it to all my social gatherings/dinners/birthday parties/appointments but sometimes I just don’t feel like going or I accidentally overbook myself and have to choose between events. Your monthly spending plan is exactly the same. In life you have a finite amount of time that needs to be allocated wisely to manage your schedule. In your financial life, you have a finite amount of money that needs to be allocated to different areas in order to manage your spending and just like life (and unlike a budget) you have the flexibility and fluidity to change your plans (and your spending) as the month unfolds, or even at the last minute if something changes.
Because of this deep negative psychological conditioning we all have associated with budgeting, I simply don’t do budgets. Instead, I plan. Just like you might plan your fun/productive/fulfilling/essential social or family engagements on monthly basis I plan my spending on a monthly basis. Once I’ve done my monthly spending plan, I check in with my plan each week just to make sure I haven’t forgotten anything, to make sure I have removed events (spending) that have been cancelled, and to double check that I haven’t overcommitted (spent more than I intended to) in any given area. Like you, sometimes I will make it to all my social gatherings/dinners/birthday parties/appointments but sometimes I just don’t feel like going or I accidentally overbook myself and have to choose between events. Your monthly spending plan is exactly the same. In life you have a finite amount of time that needs to be allocated wisely to manage your schedule. In your financial life, you have a finite amount of money that needs to be allocated to different areas in order to manage your spending and just like life (and unlike a budget) you have the flexibility and fluidity to change your plans (and your spending) as the month unfolds, or even at the last minute if something changes.
For me, doing a spending plan is quite cathartic. It is 20-30 minutes of personal time I take each month to reflect on my life. It is my time to look ahead and focus on what I hope or anticipate the next month will bring. How much money will I make? How many birthday presents do I need to buy? Is there anything I really want/need? We often get so busy in our everyday lives that we function on autopilot and miss out/forget about the important things that make up the whole adventure of this journey called life. Sitting down to do my spending plan gives me the time to reflect on my life- as I sit in front of my calendar I ask myself these things…
Where am I going (both literally and figuratively)?
What am I doing?
What are my needs?
What are my wants?
Is next month the same as/similar to this month? Will I make more or less money than I did this month?
Is it a long month? Or a short month?
Are there any birthdays I need to think about…gifts? Dinners? Cards? Events?
Am I traveling anywhere?
Am I out of any toiletries, household supplies etc? Do I need to run any specific errands?
Do I need to transfer money in or out of my savings account?
Do I need to return something I bought? Or research something I want/need to buy?
For a couple or a family, it’s a really good way to take some time to specifically think about “us”, time we will spend together as a unit, events we will attend together, things WE need as a unit. It is an opportunity for inclusion and discussion as a unit.
What events do you want to do together as a family? Movie night? Sporting events?
Do your kids have birthday parties to go to? Are they having a birthday?
Do you want to schedule an adult date night?
Are you celebrating an anniversary or milestone? Do you want to buy gifts for one another? Do you want to set spending limits for gift?
As you can see, my spending plan is essentially my vision board for the upcoming month. Extremely opposite from a budget wouldn’t you agree? Unlike budgeting, I find creating a spending plan relaxing and fulfilling. I enjoy taking the time to plan and focus on myself and to really remain present and connected to my wants, needs and goals. In the past, budgeting may have felt exhausting, trivial or like a waste of time to you. Going forward, by creating a spending plan instead, you are taking time to care for yourself, and paying attention to YOUR needs. If you are like most people you spend most of your time taking care of everyone else’s needs instead of your own- and while you are busy doing that, who is taking care of you?
You may be asking; sounds great but how do I stay focused in order to think about all of these things? It’s actually pretty easy! You have heard me repeatedly talk about the key to financial wellness being the act of tracking your spending. Part of the tracking process involves setting up a spending plan template and creating a whole bunch of categories- areas in your life where your money currently gets spent, areas where you would prefer your money to be spent, or areas where you may want to tune in better to become more aware of unconscious spending habits (I call these spending leaks!). I then use this list of categories to jog my memory, and more often than not, I will see a certain category and go “oh yeah, I need to…”. Then because I allocate money for it on my plan I actually remember do it/pay it/buy it. This works especially well when you are checking in on your plan on a weekly basis to see if my still works with any changes that have been made. Believe it or not, your spending plan can actually pull double duty as a reminder/to do list. Two birds, one stone! Who doesn’t love that in this age of mutli-tasking?
So, what are you waiting for? Get started! Create those categories and start your vision! If you need help setting up a spending plan, or figuring out how to reach your financial goals, make a free consultation appointment today and I will help you sort it all out.
What am I doing?
What are my needs?
What are my wants?
Is next month the same as/similar to this month? Will I make more or less money than I did this month?
Is it a long month? Or a short month?
Are there any birthdays I need to think about…gifts? Dinners? Cards? Events?
Am I traveling anywhere?
Am I out of any toiletries, household supplies etc? Do I need to run any specific errands?
Do I need to transfer money in or out of my savings account?
Do I need to return something I bought? Or research something I want/need to buy?
For a couple or a family, it’s a really good way to take some time to specifically think about “us”, time we will spend together as a unit, events we will attend together, things WE need as a unit. It is an opportunity for inclusion and discussion as a unit.
What events do you want to do together as a family? Movie night? Sporting events?
Do your kids have birthday parties to go to? Are they having a birthday?
Do you want to schedule an adult date night?
Are you celebrating an anniversary or milestone? Do you want to buy gifts for one another? Do you want to set spending limits for gift?
As you can see, my spending plan is essentially my vision board for the upcoming month. Extremely opposite from a budget wouldn’t you agree? Unlike budgeting, I find creating a spending plan relaxing and fulfilling. I enjoy taking the time to plan and focus on myself and to really remain present and connected to my wants, needs and goals. In the past, budgeting may have felt exhausting, trivial or like a waste of time to you. Going forward, by creating a spending plan instead, you are taking time to care for yourself, and paying attention to YOUR needs. If you are like most people you spend most of your time taking care of everyone else’s needs instead of your own- and while you are busy doing that, who is taking care of you?
You may be asking; sounds great but how do I stay focused in order to think about all of these things? It’s actually pretty easy! You have heard me repeatedly talk about the key to financial wellness being the act of tracking your spending. Part of the tracking process involves setting up a spending plan template and creating a whole bunch of categories- areas in your life where your money currently gets spent, areas where you would prefer your money to be spent, or areas where you may want to tune in better to become more aware of unconscious spending habits (I call these spending leaks!). I then use this list of categories to jog my memory, and more often than not, I will see a certain category and go “oh yeah, I need to…”. Then because I allocate money for it on my plan I actually remember do it/pay it/buy it. This works especially well when you are checking in on your plan on a weekly basis to see if my still works with any changes that have been made. Believe it or not, your spending plan can actually pull double duty as a reminder/to do list. Two birds, one stone! Who doesn’t love that in this age of mutli-tasking?
So, what are you waiting for? Get started! Create those categories and start your vision! If you need help setting up a spending plan, or figuring out how to reach your financial goals, make a free consultation appointment today and I will help you sort it all out.