Written by: Melissa Skoff, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Why is a budget so important? You have likely heard the word budget before. What does the word budget mean to you? Do you immediately dream of filling in a spreadsheet and whip out your pocket calculator? Or do you instantly think of 1,000 things you’d rather do than work on your budget?
Whether you love budgeting or despise it, a budget is a critical step in creating your dream future. So how do you leverage the power of budgeting to crush your money goals?
First, recognize that your budget is under YOUR control. A budget gives you the freedom to choose what’s important to you. It is a reflection of your priorities. Instead of dreading it and procrastinating, embrace it. Tackle it. Get after it. Clarity is key to budgeting. You must know your income and your outgo. Yes, every single line item in your budget must be exposed.
Second, after reviewing each line item in your budget, total each category. How much do you spend on housing? Utilities? Groceries? Vehicle expenses? Subscriptions? Restaurants? Online shopping? What did you discover when reviewing these totals? Does the amount you spend on each category align with your goals? For example, if travel is important to you, do you have a travel line item in your budget? Or are other payments stealing money from your travel category?
The key to this process is to align your budget with your goals. For example, paying a high dollar car payment or high amounts of income towards credit card bills when you love to travel does not get you closer to your goal of traveling more. If your goal is to retire early and live a life free to choose where you’d like to allocate your time and money resources, look at your budget. Does it get you closer to your goal?
Third, refer back to your budget regularly throughout the month. A budget is not a theoretical document. A budget is only as powerful as your ability to follow it. Speaking from personal experience, it can be easy to assign money to each category before the actual spending. The power of a budget is to make your money behave for you, which only works if you follow your budget throughout the month. If unexpected expenses come up, then it is critical to adjust your budget accordingly. It is a dynamic document. For example, if you have an unanticipated vehicle expense, you may have to shift money from your restaurant category or your vacation category to cover the expense. This is the power of budgeting. It gives you the ability to navigate the unanticipated challenges that arise while still staying on track with your money goals.
Remember, your biggest wealth-building tool is your income. A budget permits you to spend in areas that are important to you. The first step is to clarify your budget and how much of your income is going where. The second step is to align these numbers with your goals. The third step is to check and adjust your budget regularly throughout the month.
Have you tried budgeting over and over again and can’t seem to gain traction? A key piece you might be missing is accountability, motivation, and inspiration. Working with a money coach could be a game-changer for you. A money coach is a budgeting expert that can help you budget like a boss and crush your money goals.
Check out my Money Masterminds group coaching platform, where I can help you gain traction with your budgeting, saving, and investing.
Follow Melissa on Facebook, Instagram, Linkedin and visit her website for more info.
Melissa Skoff, Executive Contributor Brainz Magazine
Mel, the Money Coach, is a leader within the world of financial coaching. She is known as the Medical Professional's Go-To Money Coach as she is also a Nurse Practitioner and Graduate Nursing Educator. After Mel and her husband paid off $160,000 in 20 months, she set out to help others do the same. She has the heart of a teacher and has dedicated her career to helping others win with money, especially medical professionals. She is the creator of Money Masterminds, a group coaching platform, where she helps her clients improve their financial literacy and hone their skills such as budgeting, saving, and investing. She also has a YouTube channel called Mel the Money Coach, where she helps her listeners learn all things related to finances. Her mission: Everyone deserves to live financially free.
