"I don't like budgets. I can never stick to one."
"Budgets keep you from having fun."
"Budgets are boring."
If you have ever said any of the above, this post is for you.
Several years ago, I went through a divorce. It absolutely devastated my finances. Not only that, I had never learned to manage money. I spent what I earned, without giving any thought to savings or budgeting. If I wanted something but didn't have the cash, I charged it. Eventually my foolish ways caught up to me. I had collection agencies calling me daily. Bills were piling up. I didn't know what to do or how to get out of the mess I created.
Enough Is Enough
One day I had enough. I decided to sit down and take stock of where I stood financially. I made a list of all my debts and monthly payments. Truth be told, it was eye-opening. I had been in denial for so long. When I saw everything written down, I knew something had to change. My first step was to reduce expenses. I canceled my satellite service and purchased an over-the-air antenna. I started taking my lunch to work a couple of times each week. It didn't feel like big steps, but every little bit helped.
Taking Action
After setting aside money to pay my monthly bills, I divided the remaining money into "envelopes" – things such as gas money, food, entertainment and pet care. Once an envelope was empty, I had to stop spending or decide what other envelope to pull money from. This was a markedly different approach for me. In the past, I would spend money then decide the correct category.
With my new mindset, every dollar had a job. In short, I was finally managing my money instead of my money managing me. Yes, it was a challenge. I had to say "no" to several events. My FOMO* kicked in. And yes, I had some setbacks. But I kept my eye on the prize and knew the hard work would pay off.
I've Seen The Light
Six months later I saw the light at the end of the tunnel. The collection calls had stopped, and I was no longer afraid to open my mail. My anxiety had lessened. I was sleeping better at night. I felt empowered.
Years later, I'm still using the "envelope" method and it has changed my life. When I go to dinner, I enjoy it that much more because I know I've already set aside money to pay my bills. I'm not worried about unexpected expenses because I have an emergency fund!
I tried several different budgeting methods before I found the one that worked for me. There are a ton out there. Keep trying. Budgets are not one-size-fits-all.
And if you need help getting started, contact us. Our Certified Financial Counselors are here to help you, not judge you. We want you to succeed. We want you to reach your financial goals – no matter how small or big they may seem to you.