Pinnacle Personnel Services, LLC. | Debbie Hatch
Finding it difficult to create and stick to a budget?
In the classroom, I equate financial planning to health and wellness. We want to get healthy. We want to eat better. We want to get back to the gym or track. We want to lose weight or gain muscle. We want to feel better.
It’s hard to get started. We’ll start next Monday. We’ll start the first of the month. We’ll start the first of the year. After the wedding, after the birthday, after the trip. We’ll start when things slow down just a little.
We keep putting it off.
We do the same thing with financial planning. We want to save money for retirement. We understand it’s important.
It’s hard to get started. There are so many other things we want. So many distractions. We’ll start next month. We’ll start once we get the next promotion. We’ll start once the kids are out of the house. We’ve got plenty of time.
If you wait until you’re close to retirement to start planning, you’re going to have to be aggressive. You don’t lose 50 pounds overnight. You lose 1-2 pounds at a time, consistently. You don’t just wake up one morning and decide you’re going to retire next week: it’s time to start saving. You save $1, $5, and $20, consistently.
These tips might help you get started.
I. First, get an idea of what you’re actually spending. Don’t guestimate – look at your credit card and bank statements. Where is your money currently going?
II. Focus on your personal financial goals. These may be different than your co-worker’s or friend’s goals. Are you trying to save for retirement? Would you like to pay down/off debt? Are you saving to be able to move?
III. Look for holes where you’re money is going. I noticed two charges on my credit card statements last year. One for $10 per month and another for $17. I had shut these recurring services off but didn’t pay attention and was still being charged. That’s $324 per year! Could you cut back on restaurant expenses by brown bagging your lunch a couple times a week? Be realistic! If you tell me I can’t go to Starbuck anymore because I need to save that money, it’s going to happen for a couple days but then I will be right back to business as usual. That said, I challenge you. There is money we are ALL wasting that we could stop spending without impacting our day-to-day lives or happiness.
IV. Keep the long-term goal in front of your face, and at the top of your mind. We’re easily distracted by the new shiny thing. I want to save but…I want to go to that concert, check out the new restaurant, buy the new phone, etc. Staying on budget is boring and not a lot of fun. If you remember the goal you’ve set, though, and how good it will feel to accomplish that goal, it will be easy to stick to your plan. Remind yourself often.
V. Keep track of where your money is going. If you’re not tracking, it’s easy for the money in your wallet to “disappear”. One dollar here, five there. Before you know it, the money’s gone and we have no idea where it went. Back to the diet: when you start, you might not know what one serving actually looks like. It’s helpful to measure your food for a while. Likewise, you’re not going to have to track expenditures forever either, just until you establish a healthy budgetary habit.