I’ve heard from quite a few people who were inspired by the tracking challenge and are ready to face their finances head on. They started drawing up budgets. YES. A total win, right?
Well, it’s not that I’m not about budgets, but let’s be honest… They totally suck. Plus, mostly they don’t work. At least not most of the time. How many budget horror stories have you heard? How many budgets don’t reach their 1 month birthday?
A budget seems like the exact sort of thing you “should” do….
Well… I also “should” have gone to law school. I “should” floss after every meal. I “should” eat something healthier than the block of cheese that is currently on my plate.
It’s January again. You’ve made your resolutions and channeled all that can-do spirit into being the person you want to be… trying your darndest to start that budget or, if you’re advanced (it is January 10th…), you may have already given up on your budget and are desperately looking for another way.
I totally get it.
But here’s the good news!
Budgets are NOT personal finance. They’re a useful tool, but personal finance is sooo much more than that.
Personal finance starts well before you begin putting the numbers into little columns. Personal finance, my friends, starts with deciding what you actually want and ends with you making sure that all your resources: time, talent and sweet sweet cash are getting you closer to living that dream.
There’s an idea I read about a few months ago that has gotten me super amped up. It’s from David Bach’s book Smart Couples Finish First. In it he talks about the importance of figuring out what “values” you want in your life.
Values. Okay. I might have just lost some of you. When he talks about values, he’s not talking about what you’re looking for in a potential mate: honesty, sincerity, tenderness and trust (#perfectman). He’s talking about the big core things that we build our lives around, base all of our choices on. Our priorities. It’s the real reason why there can’t be a “one size fits all” budget or financial plan. It’s what puts the PERSONAL in personal finance. Values are the things that we really want: adventure, family, health, etc. (Check out some more examples here).
I think Bach is bang on: values are a perfect starting point. Not only do they get at the core of what you want, but they’re broad enough to be fulfilled in multiple fashions. There are a million ways to fufill a value like “Adventure” or “Balance”. And you know what the great thing is? Most of them DON’T COST A LOT OF MONEY!!! You can achieve balance by going to a yoga retreat in India, or maybe all you’ll need is to make your own quiet place: a few tea lights and a 10 dollar sitar album might do the trick. Hey, presto!!! Budget balance.
But it’s not just about being able to do something on the cheap. Your values are the ace up your sleeve, your secret superpower. It’s a lot easier to say no to that 90 dollar sweater when you’re excited about your adventure in Mexico at the end of the year. Or it might be realizing that time and money spent on tasty fruits and health veggies is far more worthwhile to you than slapping down cash for the latest Keven Hart laughfest.
Money really doesn’t matter when you talk about values. Your net worth doesn’t have to get in the way. I can’t emphasize this enough. People who are fulfilled and are getting the things that they want out of life don’t need much. They just KNOW WHAT THEY WANT. After that they buckle down and get creative.
There’s a great personal finance blog (linked in the side panel) called Mr. Money Mustache. I was reading one of his articles the other days in which he was responding to being attacked for telling people to “spend like they were poor”. What he said was perfect:
I want you to spend like you are the richest person in the world, a person who has so much happiness and balance in your life that you can’t imagine anything you could buy that would make you any happier.
Check out the rest of the article if you’re interested.
There has to be a WHY. You have to want something. A vague guilt that you SHOULD make a budget probably won’t result in real change. You can call it a “value”, you can call it a goal, it can be personal or career driven. Just make it yours. Just make it matter to you.
So that’s The Secret. That’s why YOUR budget is gonna stick. Your resolutions are going to power through January. Take all that well-intentioned energy, pour yourself a stiff drink, watch the sunset, and dream of the life you want. Not the life of little things, of material things, but a life of big things: Health, Security, Friendship, Joy, Balance, Growth…
So. What do you want?
