By Daniel Rodriguez | Dr. Budgets
When it comes to budgeting, I don’t do budgets in the traditional sense. What I mean by that is that I don’t do budgets that feel like “I’m on a budget.” Budgets seem to have a bad reputation, and the way many people budget, rightfully so. January is the wonderful time of New Year’s Resolutions, and many people resolve to finally get their finances in order. They set out to pay off their debt, save some money, and put themselves in a position where money isn’t a source of stress and anxiety for them anymore. To do so they put themselves on a budget (what I like to call a “crash budget”), which ends up feeling very restrictive because they decide to not spend money in the areas that are important to them. They literally take the “fun” out of their budget. This is a recipe for failure, which is why I don’t do budgets.
The alternative to this is to create a healthy spending plan, which is different because you start with your goals and then set realistic parameters about where to spend your money. This allows you to balance out progress toward achieving your financial goals and spending money on what you enjoy. Instead of “being on a budget,” you use a spending plan that guides you and motivates you to gradually modify your behavior to the point where you are spending less than your income. That sounds simple, right? It is definitely simple, but not easy to implement, which is how I have been able to build a business around this concept. The amazing thing is, though, once you consistently spend less than you earn, magical things happen… debt starts to disappear, checking and savings account balances begin to increase, and the stress and anxiety you feel about money start to melt away!
The way most people budget usually doesn’t work for a sustainable period of time. A healthy spending plan when constructed properly and applied consistently over the years can create lasting healthy spending habits, which then naturally leads to the achievement of your financial goals.
John Maxwell said it best: “A budget is telling your money where to go instead of wondering where it went.” When you create a healthy spending plan (the budget I believe John Maxwell is referring to in his quote), then you are in control of your financial destiny. You consciously decide where your money will be spent rather than wondering what happened to all the money you earned over the years.
So that is why I don’t do budgets. Instead, I create healthy spending plans. This, in turn, allows me to transform my clients’ lives. If you know anybody who has a financial New Year’s Resolution, please have them contact us so they can finally achieve their goals this year. Happy New Year!