If I could be financially successful without a budget, I'd get rid of it in a minute and never say that "B word" again! Unfortunately, that's not possible. Every financial expert will tell you this is one of the first things we must tackle. Tedious as it is, it's the roadmap we need to get from point A to point B. Even if you are good with money, you still need a plan and your budget is the key component of that plan. If you are already successful financially, it will enhance your success. For the record, I don't know anyone that is financially well off that doesn't have a budget. I see it as the mechanism that helps create the big picture.
I remember starting a budget and not sticking to it and at times just completely avoiding it all together. I know I avoided it because I really didn't want to focus on the necessary work I needed to do. To be honest, it was just too difficult for me to acknowledge that I had not had control over my money but my money was controlling me. One day, I asked myself that famous Dr. Phil question, "How's that working for you?" The answer was, it wasn't. Yet, I knew that if I really wanted to be completely debt free and financially well off, I had to begin to do the dirty work.
In March of 2009, I finally decided to sit down with a financial advisor and after that meeting I was so stressed and frustrated that I said to myself this has got to change. We looked at all my income coming in and going out and it was very scary. Even with a great job, I still had not managed my money effectively. Because I made the decision to look at it, I am now in a much better situation and should be completely debt free by June 2011. When I met with her, I couldn't see the light at the end of the tunnel, now I am staring right at it. That budget she and I created freed me and I began to continue to make more and more financial sacrifices. This from a woman who could say "no" to anything. Especially a great pair of shoes!
The great thing about a budget is now with technology, there are some awesome tools out there that can help you. I love www.mint.com. Mint.com allows you to see all your financial information in one place. You can set goals for buying a home, planning trips, etc. and see exactly when you'll be debt free(if you have debt). What I love most is you can set budgets for each category and it will notify when you have exceeded the budget. That means it'll hold you accountable;-)
Here are some benefits of having a budget:
1. It tells you what is coming in and what is going out.
2. It helps you make the necessary adjustments.
3. It forces you to look at where you are right now versus where you want to be in the future.
4. It gives you control and discipline.
5. It helps you to tell your money where to go.
Finally, creating a budget is great but without action to back it up, you will not succeed. What can you do today? Try by using www.mint.com or a friend to hold you accountable so you can create a budget and stick to it. Once I got serious about my commitment to living a different life financially, I cut my expenses over 50%. Next week I'll share the areas I immediately cut cost.
