Forget Budgets! Set Goals InsteadKathleen Celmins
It’s no secret: I hate budgets. Loathe them. To me, they’re like crash diets. Sure, you can lose weight by calling February an “only eat carrots” month, but that’s not setting yourself up for a lifetime of healthy decisions. The same goes for a restrictive budget. “I’m only spending $75 this month on groceries,” you’ll proudly exclaim, only to find that $75 gets you a week’s worth of groceries and no more.
What happens next is typically one of two options:
1. You’ll give up on your entire budget (not just the groceries) and overspend everywhere.
2. You’ll get “creative” with the numbers. “Well, I did only spend $75 on groceries, but let’s not talk about the restaurant budget!” you may think.
Neither one of these will inspire you to continue setting budgets. The end of the month will come, you’ll see that you couldn’t keep up with it, and you’ll sigh and wonder if you’re ever going to break even.
Forget budgets. You’re strong enough and smart enough to get your financial house in order. You just need a different approach — you need to set goals instead of budgets.
What are your life goals, and how does money come into play? More important, how are your daily habits contributing to your life goals?
If you don’t have one, now might be a good time to start writing those life goals down.
Here are some of my life goals:
-Marry once, have two kids, send them to college (if they want to go).
-Retire before it’s too late to enjoy retirement.
-Make my next house move my last. Move into my forever home and pay off the mortgage as soon as possible.
-Live a debt-free life.
-Travel more, but don’t make travel my only hobby.
-Work on side projects in my spare time. Make a small living off them.
Now, take a look at these goals. Some are short-term, some are mid-range, and some take me through retirement. Each has importance, and each has an impact on my day-to-day life.
-Since I want to retire at a limber age, I’ll have to sock money away into my IRA.
-I never want to get into debt again, so I’ll have to be careful.
-I want to send my kids to college, and I want to pay off a mortgage quickly. I’ve got to save more money now while we’re living in the condo.
-I’ll need to save up for (and plan!) more trips so we’re always looking forward to something.
-My spare time should be spent working toward the side projects and not messing around on social media.
-I should also be spending more quality time with my husband-to-be. Relationships don’t flourish in a vacuum, nor are connections deepened by sharing a space without sharing our dreams.
When, if I’m working toward these parallel and consecutive goals, will I have any time to figure out a budget?
I won’t, and that’s the point. Figure out your goals, figure out how much money each goal needs every month, and live off the rest.
Simple! But of course, simple should not be confused with easy. Oh, no. Saving half, for now, helps get me toward the specific goals, but it takes dedication every day.
How are you working toward your goals?
Photo Credit: Kathleen O’Malley