“A Budget is Telling Your Money Where to Go.”

Budgets are boring, right? I would guess that this is how the majority feels about budgeting. But are budgets boring or do we just think that it’s boring simply because we don’t really understand budgeting. Let’s first look at the quote to understand budgeting a bit better.

“A budget is telling your money where to go…” – It’s about being proactive, planning your money, you deciding where your money goes.

“… instead of wondering where it went.” – not having a budget results in losing control over your money, lack of tracking and unpleasant surprises might, or might not appear, we never know.

Basically we do budgeting in order to plan our money so we won’t be exposed to surprise attacks. If we look at it from another perspective budgeting has nothing to do with “boring” accounting, budgeting is like a military strategy! It’s all about avoiding those surprise attacks and conquering our financial goals. Let’s make our financial military strategy:

1. Identify the Goal

We can’t conquer our financial goal if we don’t know what it is. How would your ideal financial situation be? How much savings would you ideally have to handle different kinds of surprise attacks? Like your phone breaking or getting unemployed to give two examples. How much money do you need to spend each month to live the life you want to live? How much money do you need to earn to fulfill this? Do you earn enough or do you need to find new ways to earn more? Or can you reduce some expenses?

2. Create Your Strategy

Next step is to plan more in detail how much money you are going to spend and how much money you want to save each month. Create concrete strategies of how to make it happen, if you for example have $100 for food, what kind of eating habits do you need? Where and how can you do your shopping to fulfill this? Make strategies for the different expenses and also how to fulfill your savings goal. What actions are required to ensure that you actively follow your strategies to conquer your financial goal? How can you align your brain and heart to work towards the same goal?

3. Execution

Full force ahead! Time to execute your plan. Throughout the month you need to live according to your new financial military strategy. Have frequent meetings with yourself to ensure that you are on track with your plan and strategy.

4. Review

After the month has passed review the month to see how it went. How well did you achieve your financial goal? What worked? What didn’t work? What needs to be adjusted in your strategy for the future to ensure a successful conquer?

Many might feel that having a budget is all about restriction and just telling oneself what not to spend. This is a misconception and budgeting is so much more, planning your budget and executing it is an extremely strategical act and it’s all about finding different tactics to reach your goal. Just like the coach make strategies for the soccer team to win the game, like you make strategies of how to study for an exam. Don’t leave the fate of your finances to your enemy and take it into your own hands, put on your bandana and let’s start budgeting!

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