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Disclaimer: I am not a finance professional. I am the average consumer who has gone through the process of becoming debt free. This was our method, and I hope it is useful to anyone looking for budgeting in “real-life.”
Step 1 – Commit to the Idea
In many households, the “B” word is not in reference to a dog. In these houses, the slightest whisper of a different word starting with the same letter sends chills down their spine. If this is you, brace yourself:
There – I said it! Was that so bad? 😉
In all seriousness, many people completely avoid budgets at all cost (no pun intended). To these folks, having a budget promotes feelings of imprisonment, slavery, unable to spend freely and living within constraints. They don’t like being told what they can’t have.
Do you know what it really means? Self-control.
Creating and living within a budget is controlling how much you spend, how much you save and having clear guidelines that everyone in the house follows – both husband and wife. I can think of nothing that will make you feel more financially free than setting a budget. Does that sound backwards? Do I sound a little crazy? Hear me out…
- When you have credit card debt, who decides how much you pay?
- When you have a car payment, who decides how much you pay?
- When you have a mortgage, who decides how much you pay?
If you answered “I do” to any of those questions, you’re wrong. They decide. Who’s “they?” The company that you’re making those checks out to. The bank account that’s receiving your transferred payment. They are in control.
This will be news to many of you. Five years ago it was news to me! My husband and I found out we were having our first child and I wanted to stay home instead of returning back to work. We thought we could live on one income while maintaining the spending habits of a dual-income family. We had credit card debt, car payments and a mortgage… our overall spending was more than we made – but this was normal, right? Because everyone else did it, we could too, right?
Wrong. So very, very wrong.
We didn’t know what it meant to “live within our means.” We didn’t know we would feel better – relief – by having a budget. We didn’t know that sitting down at our dining room table, having an honest discussion about our finances and our goals would be one of the most rewarding discussions – and in turn decisions – that we’d ever make. We didn’t know that because of this discussion, we would one day be able to pay cash for a car!
I know that personal finances are… well, personal. I know they’re an elephant in the room in many marriages. No one wants to tell their spouse that they can’t have that new dress or new shoes or the latest Apple gadget. But can you name one good thing that comes from not talking about your financial situation with your spouse?
My point exactly. These discussions are not easy. People are going to get their feelings hurt. But let me make one thing clear so it’s a little easier for everyone involved: budgets are not about emotions or feelings or anyone “deserving” anything. Budgets are all about the numbers. Numbers don’t take sides and can’t succumb to emotions. Need another mantra? Here’s one to create your budget by:
If it doesn’t come in, it can’t go out.
It’s seriously that simple. If the money doesn’t come in, it can’t go out. Some people spend every cent that comes in and some spend more than what they earn. Neither of these situations is desirable – what happens if there’s a job loss? What happens if there’s a medical emergency? What if you want to own your own home some day?
I sound like gloom and doom, but that’s not my intention. I want to share good news with you. You can create a budget, you can live within your means and you can take control of your money.
It all starts with baby steps, one at a time. The first step is to commit to the idea of a budget. I know it sounds silly, but you must be willing to sit down with your spouse to talk about money and the idea of budgeting the money. Nothing concrete has to come out of this discussion, but if you and your spouse are not on the same page regarding finances, then it will be a game of tug-of-war without a winner. You must work together and commit together to the same financial goals.
What’s your biggest fear or obstacle when it comes to budgeting?
Disclaimer, Part 2: I know there are families who have made poor financial decisions or have found themselves in a difficult financial situation – many times through no fault of their own. My posts are never intended to hurt anyone, nor will they apply to everyone. I sincerely hope that sharing my experiences will help someone. Please only take what you find helpful to aid your particular situation.
All Posts in This Series:
Step 1 – Commit to the IdeaStep 2 – Determine What’s Coming In
Step 3 – Determine What’s Going Out
Step 4 – Determine Needs vs. Wants
Step 5 – Reducing the Needs
Step 6 – Planning Ahead
Step 7 – The Unexpected
Step 8 – Doing the Bills
If I were to write a book on debt, no joke, From Debtor to Better would be it. It’s like reading my own thoughts, but with even more detail (which is kinda scary!). It covers everything debt related: discipline, budgeting, cars, mortgages, insurance just to name a few, and it is SO funny! You will literally be laughing out loud as you read the inside secrets as to how Barry Myers paid off $20,000 worth of debt in less than one year. A must read for anyone trying to get their finances under control.
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