Do You Have A Budget In Place?
I know, I know, I know, you do not want to say the “B” word. While, you may not want to say the word, think about the word, or even execute a budget, it is very necessary. Especially, as we approach the holiday season. It becomes all too easy to fall into the debt trap trying to please everyone else. Around this time of year, the list of family members, friends, and associates tend to get very lengthy. You don’t want to leave anyone out, so you try to get everyone a gift, but it is just not in the budget. You tend to feel bad when getting one person a gift and not the other. Not to mention, you still have your ongoing bills and obligations that are probably already maxing out the budget. I know, just thinking about it is probably making you want to pull your hair out right now.
Don’t worry, I am here to help. Let’s first start by creating the right mindset. In an effort to create the right mindset, you must first do an assessment of yourself. You do this, by evaluating your spending habits. Ask yourself the following questions:
1. Are you an emotional spender?
2. Do you spend when you are happy to celebrate?
3. Do you spend when you are sad as a pick me up?
4. Do you spend to please others? Meaning, you buy what they want in an attempt to buy their affection towards you.
5. Do you spend for the validation of others? Meaning, you buy things just for the status of having it.
6. Do you really need the things you have purchased?
7. Do you use the things you have purchased, or do they sit around collecting dust?
What was your response? These are things you must confront first, both to understand your spending habits and to combat them in the future. There are certain things you can do to help the process.
1. You may want to take a deep breath and count to 10 when you are feeling the urge to spend unnecessarily.
2. Have an accountability buddy. You can call that person to talk you down.
3. Think about the emotion that is causing you to want to spend and tackle it head on.
4. Meditation may work for you as well.
Disclaimer: These are only suggestions. You should always consult a therapist for emotional spending as well as anything you feel you are not able to conquer alone.
Once you have done the pre work, it is now time to tackle the actual budget. Did you know that there is an actual breakdown of how you are to spend your income to stay within your budget guidelines? There’s a rule of thumb, so to speak.
35% - Housing (Mortgage or rent, light, gas, etc.)
10% - Savings (You should always pay yourself first. I will explain this at a later date.)
20% - Other
15% - Debt
20% - Transportation (Car payment, bus fare, parking, gas, etc.)
Now, it is time to create a financial game plan. You must work your home like a business:
1. Write down all expenses and spending (There is a difference)
2. Figure out what is needed and what you can do without.
3. Revisit them later, to see if you would like to pick them back up.
This is exactly how employers know whether they need to do a lay off or, if, and when, they want to call the employee’s back.
Since, we are amid the holiday season, be creative with your gift giving. Hand-made items are sentimental and are greatly appreciated. Here are some gift giving ideas that will keep you out of the poor house.
1. Cards – Handwritten notes and cards are such a thing of the past because of the fast pace of technology. It shows that you cared enough to take the time out of your busy schedule to put your feelings on paper.
All these things are still, so unbelievably valuable, yet so much cheaper on the wallet.
For all these and more tips, ideas, help sticking to your budget, as well as financial coaching, you can email Latonya Willett at LatonyaWillett@yahoo.com today!
Guest Blogger...Latonya Willett is a wife and a mother of 4. Latonya has been a financial analyst for 18 years. She analyzes and presents budget plans, investment ideas, as well as insurance options to her clients. Latonya also has a background in science and nursing. She's an entrepreneur, motivational speaker, and just recently added author to her list of accomplishments.