“We must all suffer one of two things: the pain of discipline or the pain of regret.” Jim Rohn
Read Time: 3 Mins
Here’s the thing about budgeting: nobody wants to do it. We all know we should be doing it, yet few of us actually make a budget. We come up with all these reasons why budgeting won’t work for us without ever trying to do one. And so, another month rolls by, followed by another, and another…
This was my life as well until one day I decided to take the plunge. Up until then, I had avoided matching my income with my expenses, and to be honest, it had kind of worked.
But let me tell you – living from paycheck to paycheck is no fun and games in the long-term. As so very often in life, something comes up when we least expect it. Something that makes us regret not having extra funds at our disposal.
This is exactly what happened to me not long ago. I found myself in a situation where I desperately needed to get away. I felt stuck, and the only way out that I could see at the time was to hit the road. The only thing standing in my way was my empty bank account.
Flash forward to today, I’m sitting on the terrace of my temporary home in Finland. I’m sipping on my coffee and catching a tan whilst writing this post. I’ve been traveling non-stop for two months now, and my journey is nowhere near complete.
Looking back, I can say that none of this would have happened if I hadn’t set up a budget. It was one of the smartest things I’ve ever done, and I encourage you to join the party.
But first, let’s address some budgeting myths. Trust me, I used to believe in them too. But they all came crashing down as soon as I started spending with a purpose and paying attention to my money.
Wrong! In fact, if your income is minimal, you need a budget more than anyone else.
Let’s be honest. If you don’t have much money to go around, you need to pay very close attention to your limited funds. You’re simply not in the same position as someone making six digits a year. They can afford to be stupid with money from time to time because they can out-earn their stupidity.
Take my word on this one. You need a budget.
A common misconception that I remember subscribing to as well. It’s funny how as soon as the word “budget” comes up, all joy seems to disappear from our lives.
What you need to do is train your mind to look at things differently. You need to understand that budgeting is about telling your money what to do. Not wondering where the heck it all went.
Do you want some fun in your life? By all means, have it – just make sure you budget for it. One way to do this is to adopt the “Pick 3 Rule” from Save Money Dammit! The idea behind this rule is to pinpoint the things in your life worth spending money on. It will help you ease into managing your budget and increases your chances for sticking to it.
You’re a fool. Don’t worry, so was I! But let me tell you, budgeting isn’t that time-consuming.
Sure, your first budget might take a while to complete. But once you’ve got the foundation covered, it doesn’t take much time to maintain it.
There is also an array of online budgeting software or download our free budgeting spreadsheet that makes it easy to manage your money well. Their sole purpose is to help you create and stick to a spending and budget plan.
CalendarBudget is an excellent free software for first-time budgeters. It uses a calendar to show you how your income and expenses will affect your budget in the future. It also boasts a clean look, simple user interface and a good set of features for financial planning.
One of the biggest misconceptions surrounding budgets – and so not true.
Look, if using software that produces fancy pie charts and detailed reports is your thing, go for it. But if like me you prefer to keep things old school, here’s what you do:
Congratulations. You just created your first budget.
If you make six digits a year and have plenty of money tucked away, you might not need a budget. That doesn’t mean you won’t benefit from it.
Same goes for debt. If you’re debt free, that’s great, but the more cash flow you have freed up, the more necessary budgeting might be.
Like with the “Pick 3 Rule”, budgeting gives all your dollar bills a job to do. Without a job, that money will likely get spent, and you’ll end up without savings. You might think you don’t need to save, but chances are that you’ll need money at some point in the future for something.
At the end of the day, it doesn’t matter who you are – everyone can benefit from budgeting.
While you should aim to stay on or under budget, sometimes life throws you a curveball.
This is exactly why budgets should be flexible. The so-called rules you set for yourself should be guidelines, not something set in stone. If you go over in one category, chances are you can “transfer” the balance from another.
Don’t let yourself get so caught up in the numbers that you forget the bigger picture. It’s highly unlikely you’ll be perfectly on point with each category you have. You need to set your expectations accordingly before you begin. Otherwise, you are going to get defeated the moment something goes wrong.
Ignoring your finances won’t get you anywhere. You should get into the habit of tracking your expenses and saving for a rainy day. Leave the guesswork out of the equation. I promise you; it will be one of the best things you’ll ever do for yourself.
About the Author:
Anu Halme is an SEO writer, content marketer and founder of Ernest Muse Creative. When she’s not thinking about cheese or deciding on the next stop on her journey around the world, she helps mission-driven business owners connect with their audience and tell their story. If engaging content full of wit and sass is your cup of tea (or a shot of whiskey), don’t hesitate to get in touch with her. Find her on Twitter at @ernestmusegirl.
Zack is one of the co-founders of FreeUp and is in charge of setting the strategy for the blog and managing the day-to-day operations. When he isn't plotting new ways to create awesome blog content, he likes to geek out about global affairs, ride motorcycles and can probably be found hiking somewhere during his days off.
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