The whole point of budgeting, besides sharpening your math skills & getting an A+ from yours truly, is to figure out how much “extra” you’re playing with every month. When all your bills are paid, how much do you have left over? Or an even better question to ask yourself – is there *anything*?
As crazy as it sounds, your boy J never cared about budgets until a couple of years ago. Or even managing his own money for that matter. In fact, if you were to ask me back then I would have told you I was The Man when it came to this stuff! Which was a) hilarious considering I was living paycheck to paycheck, and b) scary since I didn’t even know how much I was spending every month! And if a financial catastrophe hit? Hah! I would have sheepishly ran right to the Bank of Mom & Dad ;)
You see, paying your bills on time and having enough to get by is fine if you want an average life, but if you’re looking for something MORE – something that you can hold onto and build on over time – then “average” isn’t good enough. You’ve got to dig in and find where you’re leaking money! Where you can save more here, and chop off some there. And the motivation you’ll need to see it all clearly is that number at the very end – the totals that shows you whether you’ve got $XXX left over or $XXX more in debt. THOSE are the numbers to focus on. Breaking even at $0.00 is still living paycheck to paycheck. What you really need to be focusing on is getting those numbers into the positives! The more you continue to make that happen, the closer you’ll get to retirement. Or your dream house/boat/car/million dollar nest egg, etc.
For me, those totals were in bright red. Every paycheck I received, no matter how many raises I got or new careers I tried out, I was losing money. It wasn’t enough to notice at first ($50 here, $90 there) but eventually it would have caught up and slapped me silly. How the hell could I be financially free if I never SAVED anything?! It’s just not possible. If you really want to be financially successful, you’ve gotta be bringing in more than you’re letting out. Plain and simple.
And the budget, as boring as you may think it is, will point you in the right direction. What a lot of people don’t get is that it does more than just show you how much your life sucks – it shows you how it could be BETTER. It’s the whole “ya gotta see the bad so you can see the good” kinda thing. The “knowing is half the battle” G.I. Joe type stuff ;) Even if you only follow a budget for a month or two! You will learn more about your spending habits in those two months than you will reading this blog or any other books out there on the subject. And you know why? Because we’re all different. We all have our own way of living, our own way of spending, and our own plans for retirement.
Whether you choose to budget or not though, just find out how much you’re GAINING every month, or how much you’re LOSING every month. These numbers are the keys to your success. And until you can determine them, you’ll have a helluva time reaching those dream-like goals of yours. Much better to work ‘em out now than later, I say.
————–
PS: And if you are looking for a budget to start on, try out the one I use, or any others from the list of great budget templates/spreadsheets I’ve collected over time. Some are kinda purrty ;)
Possibly related posts:
