“ The more important a calling or action is to our souls, the more resistance we feel. This can be used like a compass to guide us to what is important"
-The War of Art, Steven Pressfield
If I’ve gotten the opportunity to work for your family, you’ve probably heard me use the “B-word” in almost every financial planning meeting we’ve had. Yes, we’re talking about BUDGETING. Now that that lame opening has you locked in, I want to tell you something that we both know to be true.
Budgeting stinks.
What do I mean when I say budgeting? To our clients I simply want it to mean that they are aware of where they are spending money. From a practical standpoint, that sometimes means tracking and categorizing every dollar that leaves your pocket or bank account (and I encourage doing this exercise at least once a year). Sometimes it can be even simpler by just knowing what “buckets” your money is going into (ex. spending, saving, investing, giving). Regardless of your budget’s depth, it takes actual (and sometimes tedious) work that frankly stinks.
However, it’s not just doing the work that actually gets you the results of a budget. You have to get real with yourself. It doesn’t matter if you make five figures or seven, budgeting can take your finances to the next level of efficiency and bring peace to the stress of managing your money. While this is true, if you can’t be honest with yourself, none of it matters.
First, you and your family (or company) need to commit. A budget that isn’t followed is just a number in a spreadsheet and an ingredient in a guilt sandwich we make for ourselves every time we don’t follow through on something. The good news is that I believe the quote at the top of this article could not be more true (shoutout to Michael for the book recommendation). If following through on your budget is hard for you, that means it’s probably worth fighting the battle.
Second, you have to be honest with yourself when you’re reviewing your budget each week, month, quarter, or year. Start by being thorough. Don’t conveniently overlook the ATM withdrawals, the checks you’ve written, or one-off Venmo charges. Be comprehensive about including every expense in your analysis. You also have to call all your expenditures what they are; important or discretionary. Don’t call a $100 night on the town a “little treat for a tough day”. Self-care has its place, but frequently one-time expenses become habits that snowball into something more costly.
Finally, be honest about your priorities so your budget can reflect that. Go through your family’s discretionary expenses and rank each category according to what is more important. It might be season tickets to your favorite sports team, travel, clothes, or eating organic groceries. Just don’t let yourself overspend in an area that’s not actually important to your happiness or well-being.
It’s hard to be real with ourselves when it comes to how we spend money, but a little injection of honesty can turn a budget into the most impactful tool you have to achieve financial peace.