This last week, I had the opportunity to discuss personal finance with a few individuals. One was a gentleman in his mid-twenties.
Last year about this time, he was beginning to look for a new housing arrangement. I helped him create a budget with the goal of finding out how much he could afford for rent. Fast forward to this year, he is in a good housing situation, he has paid off thousands of dollars of debt, he knows where his money is going each month, and has a plan for financial success. Though if you had asked him before he and I talked, he would have told you he did “pay attention to his money” and that he used a budgeting app.
In similar fashion, a couple had their first coaching session with me this week. They have been married close to twenty years, and would also tell you they paid attention to their money and used a budgeting app. However, much like the gentleman mentioned above, this application focused on where money went — not where you wanted money to go. In our session, we created a created a budget looking forward — giving each hard earned dollar of income a name and a job to do for the upcoming month. As we wrapped up the coaching session, the couple was very pleased to have a plan that puts them in the driver’s seat of their finances.
In both cases, the switch from “tracking” to actual “budgeting” was an instant change in their perspective. I often tell my clients, “money is a great servant, but a terrible master.” Money is a great tool when put to good use. When we do not give our money allocated amounts and specific tasks to accomplish, it costs us the ability to make specific, planned, intentional progress. Afterall, very few people “wander” into success!
When we do not give our money allocated amounts and specific tasks to accomplish, it costs us the ability to make specific, planned, intentional progress.
Please don’t get me wrong, tracking your spending and having those expenses categorized is a great start, and it is a part of the process, but it is not budgeting. A budget is a plan with your resources towards desired results. If you are not thinking ahead with your finances and later looking at the money you spent, that is a lot like looking behind you while trying to move forward. Looking back has its purpose, but that’s not the way to get where we want to be!
If you’re wanting to get started making progress with your money goals, I’d love to talk with you. Use this link to find a time that works and let’s get started!