Wednesday, December 9, 2015

Budgeting Should Start With Dreams and Goals

Welcome to the Finance Gym Action Plan for a Better Life with Money Video Series. My name's Stacey Powell, and if you're ready to not just know better but do better with your money, you've come to the right place.

Today we're going to talk about budgeting, but probably not the kind of budgeting you've ever heard about before. We're going to talk about starting your budgeting with dreams and goals.

I love budgeting. As an accountant, I've done budgeting forever. With other people's money, with other business owners money, lots and lots with my own. It's kinda second nature for me. And it's fun and something I'm really good at.

But back when I was really, really, really struggling with my money and asking other people for help. I was told to do something with my budgeting that seemed absolutely ridiculous to me. I was told to put together an ideal budget. Which I thought was the most ridiculous idea in the whole world. I was just struggling to pay my electricity bill every month, haveing enough money for the absolute necessities. And they wanted me to put together an ideal budget? Like what good was that gonna do?

But if there's one thing I am, it's compliant, and when I'm being coached in an area, I will do what I'm told even if I think I'm smarter than the person coaching me.

So that's what I did. Sat down and put together an ideal budget. Which meant I was budgeting for stuff that I had never budgeted before ... vacations, reserves. I specifically remember getting into an argument about concerts. It's not that I don't like music, I do. But it seemed to me at the time really irresponsible for me to be setting aside money to go to concerts when I wasn't keeping up with my obligations that I already had.

But their point to me was, just do it. Put your ideal life down. Put down what it is you want to be living with. And so I did, you know, and they were right. I like going to concerts.

And there was a lot of other things that I wanted in there. Disneyland went in there. I hadn't taken my daughter to Disneyland for years. And you know, not that you can raise a kid, and it's going to be the end of the world if they don't get to go to Disneyland. But I live in California, it's kind of important, right? And why wouldn't I be, why wouldn't that be a part of my spending plan.

You know what I learned about that ideal plan. The epiphany that I had was that when we create these budgets around our actual expenses, our actual obligations, it's all about constriction and fitting in what we have to do and nothing about our future, our dreams, our goals. When I had this ideal budget sitting there, that was way out of what I was able to do at the time, a couple of different things happened to me...

1. It made me realize I was not living the life I wanted to live. And there was no amount of tightening my budget anymore. My problem was income. And so it really helped me focus on the fact that I didn't need to be looking at those expenses. What I needed to be looking at was growing my income, and so I started working on that.

The other thing it made me realize is that you're going to spend a lot more time focusing on your money if the things you're focusing on are things you're excited about. I was excited about vacations. I was excited about Disneyland. I was even excited about reserves. Not that so much, you get excited about reserves but, I was excited about the idea that next time something serious happened with my car, I was going to have money to pay for it without using a credit card or making a call to the bank of Mom and Dad or where ever I would call.

So that's the thing that happened for me, that was my big epiphany, and I promise you if you sit down and roll your sleeves up and do this ideal budget you're going to have an epiphany about your financial life as well. It'll be different than mine, I don't know what it will be, but I promise you if you do it before you do your actual budget you're going to learn something, and I think it will be something of value.

Now at the end of all of these videos I remind you to please not do it alone. This is kind of a big chunk of work. And so if you have somebody who is all about your future and your dreams, ask that person to sit down with you and do this ideal budget.

If you'd like to join the community where there's other people working on this right along side you there's a few places you can go.

1. Is over at Facebook. We've got Team Do Better Group. It's completely private the only people in there are people who are also working on their money.

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Thanks for watching.

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