Budget: NOT a 4-letter word

What does the word “budget” mean to you? Do you cringe when you hear it, thinking of an end to spontaneous dinners at your favorite restaurants and a new habit of packing your lunch? No more cute shoes and Starbucks runs? If so, then you are like most people! But to me and in my financial coaching practice, budget means nothing more than an on-paper look at where your money is going.

Most of my clients come to me with needs including debt-reduction advice and help with saving more money. They’ve done the basic budgeting in their head and know there is extra money somewhere to put away, but they struggle to find it. The thing is, when they add up all the “fixed” stuff like rent/mortgage, utilities, car payment, other loans, childcare, etc, and compare that number with the amount of money coming in, a lot of people are sad and discouraged to see what “should” be leftover.

More often than not, the process usually stalls out there with feelings of poor willpower and negative self-talk. It is at this point that I remind clients they aren’t counting the other little things that are also needs in our everyday lifestyle. Haircuts, oil changes, personal care items, house cleaning, gas money, and yes, food. Most people do have an amount of money each month that they could put toward debt reduction or savings without really feeling a pinch to their accustomed lifestyle, but it isn’t as much as it initially appears.

So once you have all the predictable bills down that won’t go away without major changes, take a look at the other things you’re spending on. You will probably be pleasantly surprised to learn that even when you factor in such indulgences as date night at Nada or your daily stop at Coffee Emporium, you will still be able to find that little bit of extra money.

And even if it is only $50 per month, if you make saving it automatic through payroll deduction or auto-transfer from your bank, you will be surprised at how quickly you will see a difference. Then as you acquire little windfalls like tax refunds, a raise at work or some other bonus, you will be more inclined to put some of that money toward your goal, getting you there even quicker. So enjoy your gastronomic pleasures, knowing that you can still stick to a budget and achieve your financial goals.

A version of this article was published in Cincy Chic on April 26, 2010

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