Introduction
For each of these blog series to be truly an ultimate guide, I need to go really deep and try not to miss anything out. Anyone who has listened to my show or read my articles over any period of time knows that the tagline of the show is everything you need to KNOW and everything you need to DO to secure your financial future.
The negative space around that is that I try to omit the stuff that most people don’t need to know and DO. That’s why you don’t hear me often go into something complex like multi-generational trust planning – it just doesn’t apply to most people and so isn’t a great use of your time or mine. Each one is an Ultimate Guide for the masses; for the many not the few.
For each Ultimate Guide we have a workbook you can download for free with checklists, suggested budget category lists, a budget planner and lots more besides. If you want to take action on this stuff, this is how you do it.
Budgeting is Forward-Looking
For years my wife and I used to track where we had spent our money each month. It’s a useful skill and I’ll come back to it shortly, but no matter how fancy the pie chart of spending categories, looking backwards is not what it’s about. Budgeting is forward-looking. It’s about telling your money where it *should* go in the coming weeks and months.
This requires looking at your calendar to get a handle on upcoming events like family weddings where you might need to buy a gift, or when the car service is due. More on this in a bit, but remember, budgeting is forward looking.
Budgeting Requires Consistency
At first, like any new skill, budgeting can be a grind. But the skills learned doing it the slow way mean that gradually, you can dispense with a lot of the detail because you will learn to budget instinctively. I still think there’s merit in writing things down, and keeping a general track on things, but I know that not everyone can stand the thought of this.
But let’s not kid ourselves. If you’ve never budgeted before, you’re not going to crack this in one month, or even two. It’s going to take a commitment on your part to be consistent until the principles and practices are embedded.
Budgeting is a Principle More Than a Method
While I’m going to teach you my method of budgeting, like most things in life there is more than one way to skin the budgeting cat. So be prepared to hack around a bit and maybe blend my approach with others you might find. Watch other YouTube videos or buy books or whatever. Find what works for you and refine to suit.
More than anything, budgeting is a commitment to getting control over your money. The method is less important than the fact that you’re on top of things and taking charge of those slippery pounds as they come in and out of your hands.
Budgeting is a Foundational Skill Which Leads to Much Bigger Things
That control over the small things – the mobile phone bill or the Christmas savings – will stand you in really good stead when you move on to the sexier aspects of personal finance, like saving and investing.
So many of us are ruled by money and not the other way around. Taking control in this area will have a really positive knock-on effect in other areas. And the good news is that it really isn’t complex or difficult. As ever, it’s more about mastering ourselves than the money.
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