I'm just going to get to the point of what you're really thinking — you feel stuck when it comes to your money and you’re living paycheck-to-paycheck and you really have no idea how much you spent last month.
But you know what? The number one reason why you feel this way is you don’t have a financial plan.
I Know What You're Thinking
Feeling financially stuck is a common challenge. It's like being in a maze with no clear path forward. Living paycheck-to-paycheck amplifies this sense of financial insecurity. When your income barely covers your monthly expenses, it leaves little room for financial flexibility.
Not knowing how much you spent last month adds to the uncertainty. It's like to driving without a speedometer; you're moving, but you can't gauge how fast or slow you're going. This lack of financial awareness can lead to unintended overspending and even more to mounting stress.
The crux of the issue often lies in the absence of a financial plan. Without a plan, it's like navigating a ship without a map or compass. You're adrift, making financial decisions without a clear destination. It's challenging to set meaningful financial goals, prioritize spending, or save for the future when you lack this essential roadmap.
Ok enough of the analogies.
A financial plan provides clarity and direction. It helps you define your financial goals, whether it's building an emergency fund, paying off debt, or saving for major life milestones. With a plan, you can create a budget that aligns your spending with your goals, ensuring that every dollar has a job.
Additionally, a financial plan is a tool for building financial security. It lays out strategies for saving, investing, and debt management. As you follow your plan, you gradually free yourself from the paycheck-to-paycheck cycle, build an emergency fund, and work toward a more financially stable and fulfilling future.
In essence, a financial plan is your GPS in the journey of personal finance. It guides you, empowers you to make informed decisions, and provides a sense of control over your money. (Ok I had to add one more analogy, but you get what I'm saying, right?)
So, if you're feeling stuck, consider crafting a financial plan as your first step towards financial freedom and peace of mind.
Still Not Convinced?
So you still don't think you need to budget? Don’t believe me let’s look at the numbers:
A May 2023 study, conducted by Ramsey Solutions, revealed that 34% of Americans have no savings, 54% feel stuck in a cycle and they can’t get ahead with their finances.
A March 2023 Bankrate report found, in the event of a major economic fallout, 68% of survey takers said they wouldn’t be able to cover their living expenses for a month if they lost their job today.
The numbers don’t lie but you lie to yourself every day when you say you’ve got this. Chile, you don’t got this.
What you need is a plan. This week I’m going to give you the plan you didn’t know you needed. We’re taking a deep dive into the world of budgeting. Call it a financial plan, a roadmap, a spending/savings plan, whatever, but let’s talk about it.
This is Why You Don’t Budget:
1️⃣ You think it’s overly complicated.
2️⃣ You think it’s too restrictive, aka you can’t buy what you want.
3️⃣ You’re in denial. You avoid budgeting because it forces you to confront your financial reality — you have “bad” money habits including impulsive buying, overusing credit cards and excessive shopping or dining out.
4️⃣ You don’t realize its importance/feel you don’t need one.
5️⃣ You have never budgeted before and don’t know where to start.
6️⃣ You’re intimidated.
7️⃣ Your money situation is too complex — you have irregular income or more debt than you have money.
8️⃣ You tried it before and it didn’t work so you’re not going through that again.
9️⃣ You’re not motivated. If you don’t have clear financial goals or a compelling reason to budget you don’t see the point.
🔟 Lack of accountability. Without someone to hold you accountable, you probably don’t feel like sticking to a budget.
To overcome these challenges, you can start by changing how you think about budgeting. Learn more about it, set clear money goals, and find a budgeting style that suits you. Remember, budgeting is a flexible tool that empowers you to manage your money and reach your financial dreams.
Let’s Get Into Why You Should Budget:
✅ Financial awareness: Budgeting forces you to pay attention to your income and expenses. It gives you a clear and accurate picture of your financial situation. It helps you understand where your money goes.
✅Control over your finances: A budget enables you to take control of your money. It helps you make informed decisions about what you’re spending it on and saving. It reduces financial stress and uncertainty.
✅ Achieve financial goals: A budget helps you set and work toward financial goals. Whether it's paying off debt, saving for a vacation, buying a home, or planning for retirement, a budget provides the roadmap to reach these money goals.
✅ Debt management: With a budget, you can allocate extra funds to pay down debts more quickly, which reduces interest payments and helps you achieve financial freedom sooner.
✅ Emergency preparedness: A budget allows you to build an emergency fund. An emergency fund is your safety net for unexpected expenses like medical bills, car repairs, or job loss.
✅ Improved spending choices: By tracking expenses and categorizing them, a budget reveals spending habits. Knowing your spending habits makes empowers you to make better choices and prioritize needs over wants.
✅ Reduced stress: Financial stress can have a significant impact on mental and physical health. A budget helps alleviate stress by providing you with a sense of control and security.
✅ Long-term financial security: A budget promotes wise financial decisions, such as saving for your retirement and investing for the future, which can lead to long-term financial security.
✅ Avoid overspending: Without a budget, it's easy to overspend, accumulate debt, and live beyond your means. A budget acts as a guardrail, preventing financial missteps.
✅ Financial freedom: Budgeting is a tool for achieving financial freedom. It allows you to break free from the paycheck-to-paycheck cycle and work toward financial independence.
✅ Make the most of your money: Budgeting ensures that every dollar counts, making your money work efficiently and helping your finances grow.
✅ Plan for major life events: Whether it's getting married, having children, sending kids to college, or starting a business, budgeting enables you to plan for major life events and expenses.
✅ Peace of mind: Knowing you have a financial plan and are actively working toward your goals can give you a sense of peace and security.
✅ Adaptability: A budget is NOT set in stone. It’s a flexible tool that can be adjusted as your circumstances change. It allows you to adapt to new financial situations or goals.
✅ Accountability: A budget holds you accountable for your financial choices and encourages you to stay on track with your financial goals.
So I know accountability is hard when you’re new to budgeting. It’s one of the best way resources I offer as a finance coach — someone to stay on you when you go off the rails, someone who can encourage you in the struggle, someone to look at the long-term when you’re stuck in the now.
If this sounds like something you’re interested in follow this link right here and fill out a coaching application so I can see how to best help you and let’s get you scheduled for a discovery call.
Comment below your fears and thoughts on budgeting.
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