The Budget Puzzle

Is your puzzle missing a few pieces?

Your budget is just like putting together a puzzle. Every piece is important because without all the pieces it will never be complete. If your budget is not a completed plan for how to spend your money, it is not a plan at all. There are many things that have to be considered for a budget to work. The death of a budget is when we feel the budget has failed and we give up. It’s true the budget did fail, but we need to understand that it only failed because we failed to do what was important for it to work.

I’d be willing to bet that most of us have tried a budget before and given up in the first month. It’s probably more like the first week!! I know because I am guilty!! We went all out when we went on our budgetfest shopping spree at Staples or Office Depot prior to our TMMO. We would buy the “special” budgeting book, filing cabinet, and maybe even a book about budgeting to help us. Don’t forget about the brand new calculator that you have to have. Not because your other “new” calculator stopped working from ALL the budgeting, but because you have no idea where it is.

Since we started our Total Money Makeover we have realized that the important parts to a successful budget were never at Staples or Office Depot. I know, what a shocker right? The truth is that WE ARE the budget, WE CONTROL the budget, and WE ARE responsible for it’s failure or success. This is not to say that if we are doing it right that we will never hit any obstacles because LIFE always happens! Remember this: Successful people fail far more often than unsuccessful people do!! In addition, we fail because of what we do not know, and succeed because of what we do know! Learn from your failures. The bottom line is that you will fail, but be sure to get back up and find all the pieces again. Your budget CAN be put back together!!

Pieces to a successful budget.

PREPARATION – Whenever I put together a puzzle I start with the outer edges first. To me putting together a puzzle by starting from the middle felt chaotic, unorganized, and even overwhelming. With structure comes confidence. In budgeting confidence begins with an EMERGENCY FUND. If you are prepared for what life throws at you by having an EMERGENCY FUND, you will be less likely to give up. Prepare yours NOW!

DISCIPLINE – Discipline is never an easy thing. We are constantly bombarded by impulses to buy this or buy that. “We deserve a prize for all our hard work”. we might say. (I have used this one on many occasions. It is the easiest way to justify bad behavior.) We actually deserve financial freedom and the relief that comes with it. Discipline will keep you from making those impulse decisions to buy when it isn’t the wisest decision to make. Smack yourself on the hand and say NO, and if that doesn’t work stay home!

CONSISTENCY – It has been said that if you are consistent over time, you will be successful everytime. If you are consistent in seeing to it that your plan is followed every single day of every single month, you will reach your budgeting goals. If you are consistently breaking your budget, then one thing is for sure, you will consistently fail at it. Control your behavior and tell your money where to go and make sure it does it!

PERSEVERANCE – As I mentioned earlier, failure is likely which is why perseverance is an important piece. There are many reasons why we fail, but no matter what those reasons are, perseverance is the key to any success. You must never give up if you want to win. Instead what you must do is figure out what is causing you to fail. Doing the same thing over and over and expecting a different result is the definition of insanity.

Have you lost some pieces?

I know I sure have. We found ourselves dealing with a busted budget at the end of May. We are still recovering from it. We even had to dip into our $2,000 EF, and now need to replenish $500. It could have been worse. We thought things were fine at the end of May so we decided we could go out to eat a few too many times while on vacation. It wasn’t the meals that did us in so much as it was the “life happening” part. We lost a piece of the puzzle when we decided to bust the budget to eat out. We aborted the plan. We weren’t disciplined, we weren’t consistent, but we will persevere. First we have to find all the pieces and regroup so we can try again.

Other helpful components to a healthy and successful budget.

• Try using an envelope system to control your spending in certain categories. These categories might include groceries, fuel, BLOW money, and entertainment. Stop using your debit card when you shop. It is more likely that you will overspend if you use plastic. Spending cash hurts more so you tend to watch your purchases a little closer. Try it and see for yourself. It can be as simple as using envelopes from home or the bank, but if you are looking for the extra accountability there are programs you can use as well.

• Something else that is not only helpful but can be very important is starting a sinking fund. A sinking fund is a fund that you use to prepare for lump sum payments, such as car repair, and even Christmas shopping. If you aren’t prepared for your auto insurance renewal then your budget is going to be strained for that month. Plan for repairs, insurance, Christmas, vacations, membership renewals etc. ANYTHING that is not a part of your monthly expenses. This method will also enable you to possibly eliminate monthly payments. For example, we have always paid our car insurance monthly, but by starting a sinking fund we were able to pay for six months of insurance which lowered our costs, and freed up more money to pay off debt.

Thanks for reading and good luck budgeting!! Having a plan is the best way to succeed. Do you have a budget in place? Find the pieces and finish your financial puzzle today! You’ll be glad you did!