‘Budget’ Isn’t a Bad Word
Taking control of our finances starts with one thing, but it’s something most people instinctively cringe away from. It’s something I’ve seen many people reject, fearing it will be restricting and limiting. That thing is . . . a budget.
Setting a budget is actually an incredibly empowering and freeing thing. It is one of the easiest areas of our lives to be intentional because it is so measurable. Your budget will look very different based on your income, your savings goals, your lifestyle, and your location. That’s okay, setting a budget is about knowing what’s important to you and knowing what it costs to make those things happen. Once you’ve set your budget, you’re free to spend within that. Since you’ve set your own budget, there should be space for the things you enjoy.
Budgeting has changed my life.
I personally enjoy being able to spend money knowing that it falls within the budget. When I want to make a purchase, I don’t have to think through the entire month and try to evaluate whether I can justify this cost. I already did that when I set the budget! I don’t need to feel guilty about buying that new shirt or stress about where else I need to save money because I know there’s money in the budget for it.
How much money did you spend last month on eating out (including coffee)? Was it higher or lower than you spent the month before? If you can’t answer this question in under two minutes, I hate to be the bearer of bad news, but you are not in control of your finances. That doesn’t mean you’re in a bad financial situation, but to thrive intentionally in our financial lives means to be intentional with all our decisions.
- Sit down and write a list of the things that bring you joy in life.
Spend some time here, this can be a great exercise in and of itself to just to reflect on our everyday lives. Really dig deep, I’m talking about those things that make your life better, that bring lasting joy not just a fleeting moment of happiness. I love eating a fresh donut as much as the next person (okay maybe more), but that moment of happiness and enjoyment doesn’t bring lasting joy to my life.
- Then, rank that list.
Going through this list again will really force you to flush it out. For example, travelling and experiencing a new culture will have a different impact on your life than achieving your fitness goals, though they could both bring significant joy.
*save this list and set it aside
- Track your spending for two weeks.
There are plenty of free apps or you can use an excel spreadsheet. Track everything from your monthly mortgage payment to your weekly groceries to the $1 donut you bought at lunch. This is not just tracking the things on your list, every dollar you spend should be tracked.
- Compare your spending to your list of things that bring you happiness.
How much are you actually spending on the things you say add joy to your life? How much are you spending on things that didn’t make your list?
One thing I love about this exercise is that when you finish, you’ve already set yourself up for the next step. You can easily look at your spending and see where you can cut your budget. If you aren’t currently tracking your spending I can pretty much guarantee that there will be some area where you will be shocked when you see how much you spend.
Like every area of our lives, intentionally living with financial freedom starts with introspection. There is no right or wrong, there is simply the question:
What is important to you? Do your life and your decisions reflect that?
If they don’t, sit down, create a budget, and then stick to it.
Disclaimer: If you’re not used to living with a budget it will take you a few months to figure it out. Have patience and grace for yourself as you tweak it and get used to thinking in a new way. Just making the choice is a huge step in your journey to thrive intentionally!