Below is a breakdown of the budgeting process of life:
Revolutionise Your Thinking
First forget what you think the term ‘budget’ means. If we tell you to manage your money in the same way regular educational and financial institutions have always done, we’re not going to get you anywhere.
If any of those traditional rules helped you to be a millionaire, you probably wouldn’t be reading this. And if you are – and have made your own rules and raced down the road to riches – we want to hear from you!
For everyone else, read on to understand the fundamental difference between a budget and our budget.
Break Free of the Pay Cheque Shackles
The paycheque: So many of us live for that last Friday of the month. Stop and think about that – it’s a 30-day guarantee to financial failure. Most of us are just one missed-pay day away from being completely broke.
So how do we break out of this jail? And how do we go on to exceed our own life expectations?
A budget almost seems a bit ironic – a barrier showing us how to live within (or below) our means. We at moneysmart don’t want to limit your aspirations so therefore we have a different take on budgeting:
Essentially there are two problems in the world of money – having too little, or, having too much. Yes, there’s a common misconception that money problems are solved by simply having more money.
The first step is to change your attitude towards money. Learn how to make it work for you. More money will serve a better purpose only once you’re making smarter financial decisions with the money you already have.
In that vein we subscribe to the “BPA” theory: Believe, Perceive, Achieve… See it in your mind first, then apply it to your life.
A budget forces you to separate the necessities and priorities from the luxuries. And then – crucially – to work smarter with what’s left over.
Proper budgeting is about perspective: set a small parameter on one thing and let another take you further. This creates the same result as compound interest – one of the most powerful mathematic inventions of our time.
Goal setting is very important for this kind of thinking to be successful. A goal helps you to see the potential of doing things differently and encourages you to think smartly about what your money can do for you. It also introduces the concept of achievement – it is very satisfying to see a goal come within reach after proper planning.
This kind of goal setting through budgeting also forces you to evaluate all your purchases and ask: Does this serve me well? Or is it merely an impulse buy that will create the impression that I’m well off to my peers and my community?
It’s important to focus on what’s real and what’s important, and budget accordingly.
Check Denial At The Door
Approximately 9 million people are in financial distress, most of them are also in denial.
If you find yourself in this situation, it’s important up to the reality as quickly as possible – our vision for ourselves becomes clouded with debt, payment obligations and all the unnecessary things we believe are real necessities.
With a moneysmart budget you will be able to:
• Measure your success and celebrate little wins
• Forecast your future success
• Know when you will break even with your , paying off debt and get your money invested to work for you instead of being enslaved to it
• Capitalise on what you don’t have and work your way to achieve the upside of that!
• Read between the lines – separate the necessities from the luxuries