Are you ready to take the plunge to control your finances and stop living paycheck to paycheck? I had to learn quickly how to stop living paycheck to paycheck. It really was bad for my physical and mental health. Seriously! I remember what it was like to cringe at the word “BUDGET”.
I had to learn how to budget my money at the age of 16 when I landed my first job at McDonald’s. I had a good job after graduating college and I finally felt that things were going great with my finances. At first, everything was on cruise control but then I notice I was barely making it to the next pay period.
How could this happen? I was making more money but for some reason, my bank account was depleted. The answer was simple. I was totally living paycheck to paycheck and I didn’t even realize how much it impacted my financial situation.
Here is what happen. I totally trashed my monthly budget and I was spending without any accountability. This can easily happen when you receive a salary increase and there is no budget to account for the additional income.
Lesson Learned: Never let your money control you, take control of your money by creating a budget.
When creating a budget for our family, I wanted to make it simple and easy to follow. Everyone financial situation and budget plan will look different. You might have more or fewer categories that you need to account for.
However, it’s important to create a budget that you’re willing to stick to base on your family financial income.
Creating a budget will help you determine if you spend less than or equal to the amount of money you bring in each month? Without knowing this type of information, you can easily accumulate piles of debt.
Credit cards and loans can allow you to purchase and spend more money than your income would allow you.
For some people, “budget” is a “forbidden word”. If the term makes you flinch, shrink, or cringe, it’s possible that you have attempted a budget in the past that didn’t work for you. A budget doesn’t place a lock on your wallet, think of it as a major step towards financial freedom.
How Do You Spend Your Money?
To be brutally honest, without a budget, it’s hard to track all of your spendings. When I started making a nice income, I thought to have a budget was an absurd idea. Have you ever received your paycheck on Friday and checked your bank account on Monday?
Pretty sad right? Have you ever asked yourself what the heck did I spend all that money on? The short answer, you have NO CLUE. I know because I have ridden on that same bandwagon a few times in the past.
It’s definitely not fun nor appreciated.
Do you think you know where your money goes on a regular basis, without a budget? If you said yes, I would be honored to have you take this 30-day challenge.
30-day Spending Challenge:
On a piece of paper, or in a small notebook that you can carry in your car, wallet, or purse, jot down every cent you spend for a period of 30 days.
In this challenge, you will write down every cup of coffee you purchase at your local coffee store, the newspaper you picked up at the market, and absolutely everything you spend your money on for a period of 30 days.
At the end of the 30 days, total it up to see how much you really spend on incidentals.
Did you get an “OMG (oh my goodness) bombshell” moment or a “no problem, it’s totally cool” moment? I would love to hear your thoughts afterward. Drop me a comment or send me a message.
Three Budgeting Triggers for Financial Success
When creating a budget, you should create a budget that you can live comfortably with, as well as one that will help you prepare for long term success.
Control Over Your Daily Spending Habits
While it’s true that most people spend money on things that are not necessary, it’s important to allow yourself some money for this type of spending. When deciding on your financial goals, you should keep space in your budget for the things or activities that make your life enjoyable.
This can range from buying a cup of your favorite tea, buying a book, or simply catching a matinee with your spouse. Things that bring you enjoyment are important, but it’s crucial to have control over this type of day-to-day spending.
You do not want to let the spending get out of control.
Creating a Safety Net
A personal budget should include money set aside to prepare you for unexpected expenses. You should have access to money for things like a car breaking down unexpectedly, an illness or accident that puts you out of work for a while, or a natural disaster.
We have created this for our family, and we call it our emergency fund. A good goal would be to save three to six months of living expenses which will be a little less than your total income.
Prepare for Your Family Financial Goals
Preparing for Financial Goals: Everyone should have some type of long-term financial goals. One of your financial goals in the next five years may consist of purchase a nice house for your family. You might be excited about the idea of retiring early.
Maybe you want to send your children to college without tons of student and parent loans. Think about what you want to accomplish long term with your finances and start creating your financial plan now.
We’ve been on our financial journey that includes budgeting our expenses for almost 4 years. Every year we get better results and budgeting gets easier. We still have a long way to go and we are constantly revisiting our budget for improvements.
We are committed to taking a slow and steady approach until we reach our primary goal of financial freedom. We are done living paycheck to paycheck!