Is There A Point to Doing A Budget? OK, How About a $5,000 Raise You Can Get Anytime You Want?
George Boelcke CCP
May 01, 2007
I know, I know – almost nobody does a budget any more. We have so much of our income going towards bills, that there’s really nothing much left over to budget with anyway.
But could you do it just once? More like a snapshot of what money is going where, instead of a monthly budget? It’ll give you a black and white written record of where all your money is going. That’s one of the only ways to see, on paper, where you’re at, instead of shoveling the money out way faster each month than it’s likely coming in, and simply hoping and wishing the money is enough to make it through the end of the month.
A budget is exactly like a game plan. Kind of like going on a trip. You either get in the car and start driving aimlessly, or you have an idea of where you’re going to end up, and how to get there. One works – one isn’t likely to accomplish much as far as reaching a specific destination.
It also helps to have a goal – something concrete, specific and measurable. What’s yours? Is it to get rid of one of your payments? Maybe it’s to save a little money for an emergency fund and to finally get ahead of the game, instead of always making payments for something you spent last month or last year?
The It’s Your Money book section on budgeting has a lot of insights and ways you can take just $100 extra and pay off $25,000 in debts in less than four years. But there’s also a challenge for you: During the next week, make it a game to find out where you can cut your current bills down. Don’t assume anything, make some calls, stop and think, look at something a little different, ask some friends and see if you can’t find at least $100 to $200 to cut each month.
I bet you can do it without ever affecting your lifestyle. But here we are, feeling overwhelmed by our debts, with no clue how to make a big dent in them – and thinking “what’s the use” in even trying to reduce our monthly expenses. But that type of mindset is an absolute financial debt trap, and the first thing that has to change is the attitude that there’s no point, hope or use. There is – and it pays off big – really big if you’re prepared to look at every place your money goes in a slightly different way and with a mindset of cutting each and every bill down.
Here’s the example of what one of my readers did in just a couple of days:
Cut off a bank overdraft: $20 a month in fees and interest
Switched bank accounts for lower service charge package: $10
Changed phone carriers: $25
Changed a second line to smart-ring: $30
Changed long distance plans: $15
Cancelled two magazine subscriptions: $10
That’s just some of the dozen items in this persons’ e-mail, for a saving of around $240 a month. Over a year, that’s $3,000. Now add the tax to that – because we have to earn gross income, then pay tax to have this $3,000 left – that’s almost $5,000 worth of gross income saved!
So tell me the last time you got a $5,000 raise? Right, I didn’t think so! Still wonder what’s the point and why do it? Because every bill you cut down, every dime of interest you save, every dollar that’s NOT going out the door to make someone else rich is EXACTLY the same as getting a raise – only a lot quicker, totally within your control and easier to accomplish!
You decide how much of a raise you want from doing this – it’s totally within your control. Then make it a game and not a pain and you’d be amazed at how much money is leaking out the door that you haven’t questioned in years! Never mind the credit card payments that are choking your lifestyle, freedom and financial choices you have.
But could you do it just once? More like a snapshot of what money is going where, instead of a monthly budget? It’ll give you a black and white written record of where all your money is going. That’s one of the only ways to see, on paper, where you’re at, instead of shoveling the money out way faster each month than it’s likely coming in, and simply hoping and wishing the money is enough to make it through the end of the month.
A budget is exactly like a game plan. Kind of like going on a trip. You either get in the car and start driving aimlessly, or you have an idea of where you’re going to end up, and how to get there. One works – one isn’t likely to accomplish much as far as reaching a specific destination.
It also helps to have a goal – something concrete, specific and measurable. What’s yours? Is it to get rid of one of your payments? Maybe it’s to save a little money for an emergency fund and to finally get ahead of the game, instead of always making payments for something you spent last month or last year?
The It’s Your Money book section on budgeting has a lot of insights and ways you can take just $100 extra and pay off $25,000 in debts in less than four years. But there’s also a challenge for you: During the next week, make it a game to find out where you can cut your current bills down. Don’t assume anything, make some calls, stop and think, look at something a little different, ask some friends and see if you can’t find at least $100 to $200 to cut each month.
I bet you can do it without ever affecting your lifestyle. But here we are, feeling overwhelmed by our debts, with no clue how to make a big dent in them – and thinking “what’s the use” in even trying to reduce our monthly expenses. But that type of mindset is an absolute financial debt trap, and the first thing that has to change is the attitude that there’s no point, hope or use. There is – and it pays off big – really big if you’re prepared to look at every place your money goes in a slightly different way and with a mindset of cutting each and every bill down.
Here’s the example of what one of my readers did in just a couple of days:
Cut off a bank overdraft: $20 a month in fees and interest
Switched bank accounts for lower service charge package: $10
Changed phone carriers: $25
Changed a second line to smart-ring: $30
Changed long distance plans: $15
Cancelled two magazine subscriptions: $10
That’s just some of the dozen items in this persons’ e-mail, for a saving of around $240 a month. Over a year, that’s $3,000. Now add the tax to that – because we have to earn gross income, then pay tax to have this $3,000 left – that’s almost $5,000 worth of gross income saved!
So tell me the last time you got a $5,000 raise? Right, I didn’t think so! Still wonder what’s the point and why do it? Because every bill you cut down, every dime of interest you save, every dollar that’s NOT going out the door to make someone else rich is EXACTLY the same as getting a raise – only a lot quicker, totally within your control and easier to accomplish!
You decide how much of a raise you want from doing this – it’s totally within your control. Then make it a game and not a pain and you’d be amazed at how much money is leaking out the door that you haven’t questioned in years! Never mind the credit card payments that are choking your lifestyle, freedom and financial choices you have.
Print
Email
