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How to start budgeting

Hey everyone, welcome to my first blog post! I never thought of myself as much of a writer, so I hope you enjoy my thoughts and experiences as it relates to personal finance. Over time these posts may spill over into other areas of life like parenting, marriage, health, etc...because money touches just about every single aspect of our lives these days. And because of that, I believe it is of the upmost importance we freely discuss money and share with you, the internet!

So you're reading this post wondering what the "magic" first step is. Guess what - it isn't really magical or even a secret. You have to decide that you need a budget. That's it! You may be thinking..."What?!? I cannot believe I'm wasting my time reading this garbage." Hang with me for a bit. I want you to imagine a time in your life where you made some big changes to your habits. Maybe that was the beginning of a weight loss journey, or you were finally going to get your house organized, or it was quitting smoking. Did you stick with the change or did you fail to make long lasting change? In either case, the reason why you succeeded or failed is the same, which is the reason for the change in the first place.


That's right! It is all about your why. If your why is big enough, then you succeed. If your why isn't big enough, then you slip back into your old ways. You have to be so fed up with your current circumstances that you are mad at yourself. Is it anyone else's fault that your circumstances are the way they are? Most likely the answer is no. Who is going to make the change so you can get where you want to go? You, of course! "Okay Matt, we get it. We have to decide to make change to begin budgeting."


Well, I cannot tell you what your why is or what it should be. Only you can decide or discover that. What I can tell you is my why and hopefully you can see some similarities to your life. In May 2015, my family and I came back from a certain place in Florida where the entire trip was paid for by credit cards. My wife and I knew that going into the trip and we were "okay" with it. What we were not okay with is how we were going to pay the debt. I knew she had a large bonus from work that would help pay for a good portion of the trip. The remainder would be paid off over time (probably years). I mean we still had day care expenses for two small children, which went on credit cards as well. Just throw it on top of the pile, was my thought. It will get paid off eventually, right? So I went ahead a paid a good portion of the credit card bill once the bonus arrived. Problem solved!


Nope! The problem is I didn't tell my wife that is what I did with the money, and we didn't really discuss finances on a consistent basis. I think we just hoped everything would work itself out. Of course, a few days later she discovered the money was gone. She came charging toward me like a bull in a china shop and I happily told her that I responsibly used the money to pay for the vacation. Let's just say that "aggressive negotiations" began...yes, I'm a Star Wars fan. Once the dust settled, we decided we could no longer sustain a lifestyle reliant on debt. We discovered our why, we were both mad at the debt and the stress it was creating for us.


Based on our meager research, we quickly realized a budget was the best place to start. Once our budget was in place, the plan was working, and we became debt free nine months later (more on that in future posts). We were free from the stress, anger and shame that the debt put on our marriage. Our why fueled us until we were debt free. Things have changed for us since then and our why has evolved. One thing is for sure, we will NEVER go back.


You don't have to hit that "rock bottom" point to find your why and it should change over time. It starts with landing on a goal and your goals are probably different than mine. Okay then, maybe your goal could be that you want to buy a home for the first time, or save for a vacation, or prepare for retirement. But why are those important to you? Maybe no one in your family has owned a home of their own. That vacation is the last one you are going to be able to take with a dying parent, or it is that last family vacation where your kids are still kids. You don't want to be a burden on anyone at retirement age because you had to support your parents and that is the last thing you want to do to your kids. Whatever your goals happen to be, you'll need to make sure your why is important enough to drive you to the finish line.


So now it is your turn to figure out your why and let us know by posting in the comments. In the next post, I will discuss what a budget actually is and the nuts and bolts of what to include. Warning there will be math...so prepare yourself! Whew, you made it to the end of this post. Thank you for reading.


Matt Lampe is a Ramsey Preferred Coach, which is a fancy way of saying he's a Financial Coach. He can help you realize your financial goals and guide you through the steps. If you'd like to schedule a complementary call with him to see how he may be able to help you and your family visit here.



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