Seeing that I’m a budget coach, obviously I think budgeting is a total game changer! However, you don’t have to take my potentially-bias word for it, the proof is in the pudding. Budgeting is meant for everyone. Regardless of your income level, debt situation, past experiences or anything else, budgeting changes the game for everyone. I’m going to walk you through 6 ways budgeting changes the game, so you can get on board the budgeting train!
My budgeting story
Before I dive into why budgeting is a total game changer, I want to share my story with you. I lived in a big, expensive city, and I wanted to enjoy life. I took trips, I dined out, I bought designer duds. Then, I couldn't pay rent.
I literally walked to my apartment door and faced an eviction notice. Pay in 3-days or get out. Crap. I got paid in 5 days. This was my wake-up call. All of the "FUN" I had could not save me from being evicted. If I only put aside my rent money BEFORE going on a girl's trip. I worked my tail off those next 3 days, and paid rent with every last cent I had.
After that, I got it together. I started working overtime. I stopped going out to eat. I got a roommate. I shopped in my closet. I started writing my expenses down. I created an excel spreadsheet that outlined my expenses. I made sure priorities came before anything else.
Then, I lost my father to a drunk driver and had to move back home. The cost of living in Austin (home), is significantly lower than Los Angeles (where I was living). All of those positive habits I began implementing in LA, continued when I moved to Austin.
Only now, my expenses reduced dramatically. I was no longer breaking even; I was at a surplus. I started putting everything extra towards my debts. I paid off thousands of dollars’ worth of credit card debt in just over a year.
Once the debts were gone, it was a whole new ball game. I had a small emergency fund, then a big emergency fund. I'm on track to retire with over 1 million dollars. I was able to start my business, save for retirement, take trips (without using credit cards), and feel the weight of debt and poor budgeting lift off my shoulders.
All of the amazing things I did were only done because I budgeted my money, and I stuck to the budget I created. You can also watch me tell my budgeting story in much more detail in the video below.
Ways budgeting changes the game
#1 Budgeting shows you what you can afford to spend and save
One of the most important aspects of budgeting is the fact that it shows you exactly what you can afford to spend and save. Since your budget will outline the money coming in (income), the money going out (bills and expenses), your savings and extra debt payments, and what’s left over, you are able to see if you can afford your situation.
Your budget will show you if there is something you can’t afford. Since everything should be accounted for in your budget, you can see what you have left over each month.
#2 Budgeting shows you where you are overspending
Your budget will also show you if you are in the negative each month. This means you are overspending. You need to get to the root of where you’re overspending, and your budget will help you do that. You can see how far your income takes you before you have run out of money.
Ideally, you’ll be able to cover everything you need to spend money on each month, but if you’re overspending, that won’t be the case. Most of the time, the overspending comes from the areas that don’t have a specific number or due date tied to them, and are often discretionary.
It can be easy to overspend on going out to eat, shopping, putting too much in savings, or any other variable expense. You’ll have to use your budget to show you what your limits are to safely spend on these types of expenses.
#3 Budgeting shows you when you’ll reach your goals
Another great thing about budgeting is that it can show you when you’ll reach your goals. For example, if your budget shows that you can comfortably save $250 every month, and you have a $1000 savings goal, then you’ll know you can reach that goal in 4 months ($250 x 4).
This information can be so powerful! You can use the information to plan ahead and set multiple goals. You can also think about how extra money can be allocated to help you reach your goals faster. Your budget shows when you’ll reach your goals based on your current income, but what if more money comes your way? That’s a good problem to have!
#4 Budgeting gives you the freedom to choose how to spend your extra money
Budgeting changes the game because it gives you the freedom to choose how you want to spend your money, including any extra money or profit you have each month. You get to allocate your income and determine where your money goes. If you have a profit each month, it is 100% your decision on what you want to do with it.
That freedom is the beginnings of true financial freedom. The freedom to spend your money as you please because your priorities are covered, you are thinking about and saving for your future (ideally), and you can choose to do what you want with the left overs.
#5 Budgeting allows you to spend without feeling guilty
We’ve all experienced buyer’s remorse at some point in time. We spent money when we shouldn’t have, and then we felt like crap afterwards. When you have a budget, you have an income amount you can allocate towards purchases.
When you know that you can afford to spend money on those purchases, you can move forward with them and not feel guilty about it! You know that the cost was budgeted for (which means you can afford it) and it doesn’t have any impact on your other priorities getting taken care of.
Imagine…not feeling guilty for buying a brand-new bag?! THAT is the life! 😊
#6 Budgeting puts you in control of your money
Similar to budgeting giving you the freedom to choose how you want to spend extra money (after your bills and expenses), budgeting puts you in complete control of your money. When you know what income you’re working with, you have full control over how it gets allocated.
Obviously, you can make some bad decisions with that type of control, but when you have a budget in place, you’ll have a clear picture of what bills, expenses, savings and debt payments need to get taken care of with your income. Being a financially independent lady means all of those things will be covered (and you control that decision)!
If you are ready for a budget that totally changes the game for you, click below to schedule a free consultation with me!
I hope my money story above shows you how budgeting changes the game. Once I got serious about budgeting (for the second time), I was able to turn my financial situation around in a short amount of time. It required sacrifice and wasn’t easy, but I would not change it for anything. I’m in the best place of my life and it feels so good – that’s why I became a budget coach! So, I can help other women do the same!
Do you follow a budget? How has budgeting changed the game for you? Share your questions and experiences with budgeting by leaving a comment below!
The CGS Team