Welcome to the “Budgeting Tips” series! These tips have proven extremely helpful in getting my own budget in order, and I’m confident they can help you too.
Budgeting Tip #1: Give Every Dollar a NAME
Have you ever started out the day with some money in your pocket (without any intention of spending it) only to return home with only a couple of crumpled dollar bills and a few coins remaining? It has happened to me more times that I would like to admit!
This situation occurs because of a combination of two things: (1) Impulsiveness and (2) Unplanned money
Impulsiveness just may be the biggest threat to your financial well-being and ability to build wealth.
When impulse meets unplanned money, it is scientifically proven to cause your money to sprout wings and fly away. Marketers know this very well. It’s why grocery and convenience stores put candy at the checkout line. It’s why an item you have searched for on Google suddenly appears on your Facebook feed.
It is virtually impossible to prevent the impulse to buy from happening. The big challenge is to prevent the impulse from destroying your financial future. How does a person do that? Creating and following a budget each and every month – before the month begins. It allows you give every dollar a name before it actually arrives.
A budget allows you to move from managing money IMPULSIVELY to directing it INTENTIONALLY. Intentional money management always trumps impulsiveness.
Because I have made it my habit to prepare a budget each month, I have been able to prevent impulses from destroying my finances. I believe it will do the same for you!
NOTE: This post is part of the “Budgeting Tips” series. Click HERE to read other posts in the series.