Exercise Your Finances
Maybe you’re living on easy street, but these days it seems like everyone is having to tighten their belts a little more. Your dollars just don’t go as far as they once did, and you’re having to be more intentional with how you spend.
Maybe you’re scrimping and scratching for every penny. You don’t know why the money runs out, but it’s always gone before the month is. The debt is stacking up, and you don’t see a way out from under it.
Whichever the case, the solution is the same. You won’t figure out where the money is going until you take the time to dig into your personal finances. It’s time perform an audit on your bank account, take stock of your expenses, and tackle your bills. You need to make a budget.
A budget is telling your money where to go instead of wondering where it went.
– John C. Maxwell
I know. The idea of writing your first budget is like going to see the dentist after not cleaning your teeth for a couple of years. The reality is that it’s more like starting up a new exercise regimen. At first, it’s going to hurt a lot, because everything is stiff after years of being ignored. If you stick with it, though, the pain eases and you start to feel better. Eventually, it becomes a daily practice that you can’t imagine living without.
What diet and exercise does for your physical health, a budget does for your financial health.
Still, pushing through that initial pain can be difficult. It seems like an endless cycle of organizing papers, checking numbers, working the math, discovering you’ve missed something, and starting over. The frustration of it can lead to discouragement and could make you want to give up.
What can you do?
Well, a lot of things, but here are three suggestions to start with:
1. Don’t Overdo It.
Personal story time. I started learning karate last year as a part of an effort to get my physical health to better match my improving financial health. I went into my first real class all gung-ho and pushed myself hard. It felt amazing. I couldn’t wait for the next class.
And the next two days, everything that I did hurt everywhere in a way that I didn’t know it could. That pain tried repeatedly to talk me out of going to the next class. I still went, but I had to fight myself to do it.
In the same way, if you overreach when trying to put an initial budget together, you can get slapped down hard. You need to get the basics down. Figure out your essential needs, and make sure you can cover them and stay current on them. Then quickly rough out where the rest of your income is going to go. It won’t be perfect, but when it’s done you can tell yourself that you stayed fed and kept your lights on, and everything you learned from the first month will make the second month’s budget even better.
2. Get A Trainer.
Learning a new skill often requires the help of an expert. Personal finances aren’t any different. If you don’t know where to start you should seek advice and assistance.
Make sure your advisers are speaking from a place that you want to be. If you want to cut your debts, find someone who has paid off all of theirs and ask them how they did it. If you want to grow wealth wisely, find people who can explain their long-term investment strategy to you.
Give your advisers permission to hurt your feelings. You need to be able to hear them when they’re talking you out of doing something stupid. They need the power to say ‘NO’ to your plans and ideas.
You can’t judge results on one trip to the gym. You have to give your efforts time to produce a change. Writing a working budget doesn’t start showing results until you’ve been doing it, on average, for three months. Commit to writing a new budget and following it to the best of your ability every month for at least six months.
Whether you feel like you’re fighting to survive each month, or you’ve just tripped and stumbled on your stroll down easy street, it doesn’t matter. The monthly practice of a budget is your answer. It’ll probably hurt to start with, but the long-term reward is worth it.
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