My last post was how so many of us are driven by the impression they want to leave. It told how you have to be true to yourself and don’t worry about impressing others. Fact is, they may not even now you. But you know yourself, and you need to realize the only one you need to impress is YOU! Unless you get off that need to impress others, you will always be lost in the journey of your life.
Wise budgeting begins with being empowered with self-awareness. From this point you gain your strength and confidence where good things happen. Let’s begin…
Where Are You Right Now Financially
I thought I was either doing okay or not really sure, I now realize I was lost and no matter how hard I tried to get out of debt – I kept digging myself in deeper. I was living at home with my parents and siblings, afraid I would never really be able to ever live on my own and experience life. In 2008, I remember getting a call from somewhere saying there was a warrant for my arrest and if I did not do as they said they were coming for me. It scared me, and I wrote a note to my little sister before heading out to work that night saying I did not know what was going to happen, but I wanted her to know and share that I loved everyone very much.
A few days later I was out shovelling snow, and my stepdad came out to join me, but not to shovel. He wanted to talk about the note and offer some valuable advice that changed my life that day forward. Years of struggling, I finally realized I needed to get my financial act in order. Today I have my own place, and I owe it all to my stepdad’s wisdom. The one line that stands out today is “of all people, I always thought you and Christa (my youngest sister) would make it in this world.” To hear this really made me take another look at everything I was doing.
Where Does Your Money Go?
Honestly, I had no idea where my money was going or what it was doing. I was letting it run amuck all by itself. I was trusting it, which many of us I think do and realized in doing so, my money got me lost. That night I took out all my bills and receipts and made a list of everything I had bought or paid for to date that month. From this list I was able to assemble my first category of expenses and what I was spending for that month in each,
Then I took and made a list of income I was receiving for the month – I suddenly realized I was living on credit. Credit is future money. This was future money already spent now and it was growing. What was I to do now, I had already got a loan and refused the second time I applied, so I borrowed from my stepdad and to pay him off, I had taken a job waitressing back in October of 1989.
Do You Have a Basic Starter Emergency Fund?
Over the years since I started budgeting I have learned so much about myself. One thing I encourage everyone to have is an Emergency Fund. I am an avid follower of Dave Ramsey, and if you don’t have this – get that basic starter emergency fund in action FAST! He says $1,000; I say you have about $2000-2500 in this fund. Open a special savings or IRA and work on funding this as soon as possible. The feeling of having such an account with cash in it is so incredibly refreshing.
Once you have that in progress, you need to begin framing your basic beginners budget. Understand that a budget is NOT cast in stone and flexible, as you will learn.
Framing Your Basic Beginnners Budget
As you set up the four basic categories for your budget not which accounts are current and which ones are not current. You must bring everything up to current status. This means noting current payments and past due statuses on all your expenses. I recommend starting iwth four folders- each representing on of the four categories of expenses. These categories are:
- CURRENT MONTHLY EXPENSES –
- THESE ARE EXPENSES YOU MUST PAY THAT ARE ESSENTIAL TO LIFE, LIKE ROOF OVER YOUR HEAD, HEAT, LIGHTS, FOOD
- TRUE EXPENSES (OR OTHER MONTHLY EXPENSES)
- THIS CATEGORY REPRESENTS ALL OTHER BILLS YOU PAY EVERY MONTH OR EVERY SO OFTEN.
- DEBT OWED TO CREDITORS –
- THIS CATEGORY REPRESENTS THOSE THINGS YOU HAVE BOUGHT ON TIME OR CREDIT, AND PAYING FOR ON AGREEMENT (E.G – YOUR CREDIT CARDS)
- PERSONAL SAVINGS –
- AMOUNT YOU ARE PAYING YOURSELF AND SETTING ASIDE EVERY MONTH FOR YOU.
Wise Budgeting: Are You Ready? Let’s You Do It!
This is the basic journey to wise budgeting that begins empowering you with self-awareness. Knowing exactly what you have and where it is going all the time. Being focused with a new understanding as to who you are and what you want to accomplish for your family and yourself down the road. Wise budgeting lets you do it and follow the right road to financial success to true happiness.