I know… most people look like this 😩 every time finance planning or budgeting is mentioned.
It’s overwhelming, especially when we *know* we’re spending more than we should. Ordering take-out on a busy day is way more convenient than stopping at the supermarket or planning your meals a week in advance.
I, personally, like using “financial planning” better than “budgeting”. For me, the budget has this negative connotation. Sounds like I’ll need to give up everything good in life just to have some money in my bank account. Financial planning makes it more playful. Makes me feel like I can plan certain splurges every so often.
What does financial planning entail? It’s simple and straightforward. All you need to do is know how much money is coming in and write down what is coming out.
My first step is always income. For those whose income fluctuates or is seasonal, you can use a good guess and always, I mean always, save money when you make extra. This will help you cover for those months your income will be a bit lower.
The next step is to write down all your fixed expenses – those expenses that you know you’ll have to pay. Mortgage, rent, utilities, groceries, etc.
Moving even further, I like to open 3 months worth of bank/credit card statements. Yes, this is a very terrifying step. But allows us to see where our money is going. And what is essential. And what is
If you are like me, that is a scary step. Because we don’t see where our money is going. Because we spending most of it on cat toys, snacks, and drinks at the ski resort. All because my cats and I deserve it. Because I work so hard, a $9 glass of wine will not break the bank. But if one turns 2 and weekly – that’s a situation. I can, probably, buy the entire bottle for under 10 bucks at the liquor store. So yes… that is a situation.
After you know how much you make (income) and how much you spend, you can actually PLAN!
You can plan your vacation, you can plan to buy your home, you can plan to pay off your student debt, you can plan to upgrade your car. Whatever floats your boat. Saving as little as a cup of coffee a day, it can do wonders.
Here, at the Bier house, we went back to planning our meals. We bring our snacks to the slopes. It’s a little. But it helps.
Financial planning is the mindset switch from working to have money to have your money working for you.
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