“Do You Need To Budget?”….. I really wish I had a dollar for every conversation where someone has said to me “I don’t need to budget, I *** ***** **” - Usually, the very next thing they say IS THE EXACT reason why they SHOULD be budgeting. Here are the top 3 reasons why you need to budget:
Reason 1: “I don’t have anything to budget with” This one I hear a LOT (and it breaks my heart, to be honest)… People who have said this (and maybe you are one of them) are the ones that need to budget the most.
Even when you think you have no finances to manage, you still have finances to manage!
You will always have the rent to pay, bills to pay, mouths to feed, mobile phone and internet bills to be kept on top of…. And if you are a smoker, you will always find ways to pay for the smokes. If you are an animal lover, you will never let your pets go hungry…
And yet still they will say that they have nothing to budget. There is always stuff to budget with and for – even the shortest list of expenses still needs to be managed and monitored - to see where you can tweak it here and there, and maybe even cut back on a few things (see my Wants vs Needs article for more info).
Spending Made Easy had a client once who was paying for two gym memberships – without even realising it - and they weren't even going to the gym! Rest assured that person now does NOT pay for those two gym memberships as they now MONITOR all of those little expenses. They are of course, better off too! You can be too with a budget as you might find mysterious and accidental spending that could be avoided...
Just think about it, this person had two gym memberships which tallied over $2,500 per year. That's potentially a holiday, new TV, food on the table, or even contributing to a house deposit. Don't you want extra cash? All you need to do is budget.
Reason 2: “I am quite comfortable with my finances right now” This one I hear a LOT too (yes, I really do!)… If you are comfortable, how comfortable are you? If you don't have a budget then how would you never know.
Like how on Earth can you know how much surplus you have if you are not paying any attention to your finances? If you were earning say $500k to 600k per annum, you would be wanting to SAVE (or INVEST) at least $300/400k per annum... And it is the same when you are earning $20k to 30k per annum.
Often the high earners are “the worst” because there is a general thought among them that they don’t think they need to monitor anything, they are often more frivolous, more generous, and more carefree with all that money.
Makes me wonder how much of it may be going down the drain? Think about it, how much of your money is going down the drain?
At Spending Made Easy, we have a client who earned a LOT of money (literally hundreds of thousands per year). However, they had no savings, no superannuation, they didn’t even own a house… They were confused as to why they had no finances or savings behind them. Why? Because they were spending it all, and not paying any attention to the spending either. Essentially, making it harder and harder to retire.
Safe to say, once they had a budget (aka a Spending Plan), it was VERY evident where all that money was going and what was left over after all of those extravagant expenses… It is interesting to note that they never felt wealthy as their bank balance suggested.
So essentially, high earners can be pennyless and low earners can be too, BUT it doesn't have to be that way. What do your finances look like?
Reason 3: “My Spreadsheet is Awesome”
While your spreadsheet is awesome, does it seriously help? A Spreadsheet is only as good as the person programming it and mistakes are often made. You need to be good at the software and good at budgeting...
The number of times I have heard “I just break everything up into weeks, or fortnights, etc”… amazes me.... Whilst this is a good system and a great mindset to have, it is also a LOT of effort when you pay for things. Essentially, there is not 4 weeks in a month or 2 fortnights within a month... Just check your calendar, and with this, bills come in at all sorts of frequencies; monthly, weekly, fortnightly, quarterly, annually etc. So your spreadsheet budget couldn't possibly work and would contain a huge amount of errors.
Plus, you may get paid weekly and your partner/significant other gets paid in another format/frequency… It is all too hard, problematic, confusing, and that calculator would have steam coming off of it when you did a proper, detailed budget. Check out "Frequencies Do My Head In" - because they do and they will for you too!
The Solution: Get a Spending Plan With a Spending Plan, you NEVER need a calculator. It can handle any frequency, and it can even project 10 years into the future. How cool is that? It even has pretty images and graphs too, so you can see where you are at, and more importantly – where you need to be. Do yourself a favour and get a Spending Plan… Everyone needs to budget and everyone can benefit from having a personalised Spending Plan, no matter how much you earn.
In a Nutshell
Everybody needs to budget – in some form or another. I am not suggesting for one minute that you have a minutely detailed spending plan/budget (unless of course, you want to) that gets you in a bad mood and you feel like you can’t enjoy yourself anymore…. That is NOT what a Spending Plan is. Just KNOW where all your money is going; what is due in and when, and what is due out, and when. Easy!
No calculators are needed at all with a Spending Plan and it will relieve stress, sleepless nights, and can even stop you from arguing with your partner over money (ask any of Spending Made Easy’s clients).
If you think a Spending Plan can help you, then please contact me to find out more. We will create a personalised, detailed Spending Plan, just for you!
You won’t regret it! You can book in here for a no-obligation chat.
For more information, check out www.spendingmadeeasy.com.au The testimonials speak for themselves…
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