What if we don’t call it “budget”?

For most people, to say “I am on a budget” is a signal of scarcity. It is considered as bad and as restricted as saying “I am on a diet”.

But what if I tell you those two words are completely misunderstood? All I am going to say about being on a diet is that it doesn’t mean to be about no eating certain kind of foods or not eating at all. That’s just bad advice, plain and simple; it is misinformation. Free tip: just eat balanced.

Budgets, sadly, have the same connotation. Not spending getting certain items or not spending at all…see? bad advice…who could keep up with that? It is all about balance, again.

Let me tell you a bit of my story on this regard. Since I can remember, I used to see my mom making little stacks of money right after receiving her paycheck. Just so you know, I am talking about 40 something years ago. She would cash that check and have one little stack for rent, another for utilities, one more for groceries shopping and so on. My mom is really organized and focused. She knew that money had to last until the next paycheck would come. Anything extra, such the annual bonus would help for clothing, Christmas gifts, etc. I am very proud to have learned that from mom. I started applying the same concept until I went south and discovered credit cards and mismanaged them. Story for another post.

Let’s say it wasn’t perfect, but I started building the good habit to know before hand, where my money was going. I would make a list of expenses and knew when a bill was up for payment, not bad. 

Well, then I started to be more curious about personal finance and discovered that I could add more lines to that “budget” and also learned the biggest lesson: I get to keep some of the money I made, huge eye opening. Another lesson: I didn’t have to put our vacation on credit cards. Another line in the budget and some planning will be the perfect combination to do so.

See? A budget helps you in the greatest way to freely accomplish whatever you want! It is a plan, a saving-investing-spending plan. Everything goes there so you get to see that you are saving/investing some, you get to see you are able to pay for your home (mortgage or rent), utilities, groceries, to have some fun, etc. And you get to see you are putting aside some other money to travel or to buy big ticket items. Isn’t that amazing? Don’t you feel powerful when you are the one who decides where your money goes? I do! And I can also give my word to you I don’t have those guilty feelings of using the money for things that were not planned. 

Here it is the tricky part: you have to be intentional. You need to have a clear vision of what you want and what it is that makes YOU happy. Saving and investing are NOT optional, they are not negotiable…let me repeat that for the people in the back: saving and investing are not optional, not negotiable, and we will talk about it soon. Let’s focus on the expense section of this master plan: don’t buy shoes because your friends are buying shoes. Don’t go to Disney World because everybody goes. Go to Disney World because you cannot wait to have a picture with Mickey. In other words, spend your money with absolute intention. Know that every dollar that leaves your bank account is doing it with a purpose that fulfills you. 

Action Step: Start tracking every single transaction that happens in your bank account and make sure it has a purpose. For example: your gym membership, are you really going to the gym. Magazines subscriptions, are you really reading those? Let’s mention something way cooler than magazines…do you pay for those seasonal surprise boxes with makeup and other fun stuff? Do you really use everything that comes in that box?

Go through every transaction and make a conscious decision. Do those expenses align with your goals? Let’s start building that smart money plan!