Adobe Spark (23)Your jaw is probably hitting the ground right now reading the headline of this blog.

But I’m being honest, I don’t want you to budget…

like this:

If you google “Personal Budget template” you get 22.3 million results and they all look like this.  You have your income at the top, then your bills and expenses.  Then at the bottom…then BOOM…you have money left.  Right?

How many of you have tried a budget like this?  What was your end result?  Did it work?  Did it end in frustration?

Most of the people I talk to say they tried it but their “net profit” never seemed to line up with what they actually ended up seeing in their bank account and they feel like they are bad with money and they are never going to get control of their finances.  I’m here to tell you today that if you are one of the many people that feel like a failure after using this type of template, IT IS NOT YOU.

This is a flawed budgeting system that failed you!  This type of budget is very 2 dimensional.  It doesn’t represent the timing of real life, it doesn’t show you how money is connected and it doesn’t show you how one financial decision you made today can effect your finances in the future.

You want your budget to be a roadmap or google navigation on your phone.  It should tell you where you are, where you were, where your final destination is, if there is any roadblocks or construction on the way, any alternate routes, how long it is going to take to get there and how fast you’re going.  The old way to budget is basically just the directory map in the mall saying, “YOU ARE HERE.”

Here are some tips on how to make a Four Dimensional Fiscal Fitness Phoenix Budget that will take the stress out of your money and make you feel like you can win at budgeting.

  1. When you create a budget, focus on budgeting per pay period not per month.  This takes care of the timing of your budget.
  2. Make sure you have your bills in due date order so you can keep track of when to pay them between pay periods.  Putting them in order of highest to lowest, order of “importance” or in categories isn’t beneficial at all.  This seems like such a simple thing, but by doing this one thing can makes a big difference for a lot of people.
  3. Budget out at least 3 months at a time.
  4. Think about random expenses and save for them monthly.  You don’t know when you’ll have to spend money on a car repair or home repair.  You also probably don’t plan for paying for car registration, insurance that comes out semi-annually or other bills that aren’t monthly.  By coming up with a yearly total for these expenses, then dividing by twelve, will allow you to save for these expenses that are 100% going to happen.  If you don’t do this and one of the expenses come up, it is more than likely going on a credit card and putting you into debt.  This also gets the money out of your checking account and ear marked for a future expense that is guaranteed to happen.

Hopefully these tips will help you start to see that a budget should be fluid, intuitive and take time and future decisions into account.  If you have any questions about budgeting please email us at info@FiscalFitnessPHX.com.