Your Financial Road Map
The following is an excerpt from Chapter 14 "Enjoying the Journey" (my favorite chapter) of my new book, available here.
Whether you are in debt, are working your way out of debt or are free of debt, maintaining a budget will be the key to reaching any financial goal. It's not something you do for a while and then put away into the closet for a year or two. My guess is (like me) you are not disciplined enough with your spending habits or mental capacity to keep it all in your head.
Think of it this way: You wouldn't start a road trip from Los Angeles to New York City without first looking at a map, would you? Even if you are the adventurous type and were hoping to make it without a map, you would no doubt at least stop to ask for general directions, read road signs or at the bare minimum use the sun for guidance.
I think it's super important to think of your budget as a road map. Once you have a point of reference, you can look ahead to where you want to go, and you can also look back to see where you've been.
When I first got a checking account (I think I was 14), all I was taught was how to keep track of the checks I wrote. Debit cards were still in their infancy, at least at my local bank, and checks were how we paid for things if we didn't have cash. With the checkbook and register, keeping track was the name of the game. But it was all reactive and it was only keeping track of the past.
One of the best parts of a road trip is looking ahead - looking at a map and planning out the next stop, the sites to see and the places to eat. I suppose the days of getting out an actual map are nearly gone forever, too. Anyway, you get the point.
You don't spend the road trip looking in the rear-view mirror. That's what's happening if you are not budgeting and just stare at your bank statement every month and wonder what happened. You have no map to look at - you only have last month's expenses staring at you.
If you want to make a change in your finances, you've got to start looking at a map. You've got to plan out your next move and then start driving, only looking in the rear-view mirror to make sure there's no smoke. Keep pressing forward and planning your next move. Start budgeting, and follow the map to get where you want to go.
How often to you look at your budget?
P.S. We want to help you get on a budget! One of the ways we provide motivation (and stories of our money mistakes) is through my book "It's Your Money."
You can buy the book four ways:
- Digital download ($4.99): You get the book in three versions for online viewing or printing on your own.
- Amazon Kindle store ($4.99): This has been the most popular way to buy thus far.
- Paperback via Amazon ($8.99): This is our favorite version!
- Package deal: You can purchase the paperback version at full price, and then offers the Kindle version for just $1.99.