When completing the financial plan, we ask all our clients to develop a current and retirement budget. For some, this is a big ask. Sends a shiver down the spine. Today I challenge us to consider the idea: a budget is not a foe, rather a friend. It is about liberation, not restriction. A tool to empower ourselves in our financial and personal lives. Our budget can help us make informed decisions about how to spend our money to enrich our lives.

Like the financial plan, our budget is an evolving, ever-changing document. It’s a reference point for the goals we have for ourselves. As we change, our budgets and financial plans change with us. Even though change is inevitable, what is important is we made a plan to help us achieve our goals. We have a carefully considered map of how to get from point A to point B.

Budgeting is often seen as restrictive. Though fundamentally, it is a tool to educate ourselves about our spending habits and gives us an opportunity to adjust those habits. The only restrictions you face are the ones you place on yourself.

The key is we set goals, guides, and plans for ourselves. How or when we achieve them isn’t anyone’s business but ours. If we reimagine budgeting as an instrument to get you from where you are, to where you want to be, it becomes easier to see our budget as a friend.

Once we know where we want to go, we must determine how to get to our destination. Our budget helps us make those decisions. To plan for the now and the future. The budget supplies us with knowledge of where our hard-earned dollars are going and allows us to refocus them toward places that get us closer to our goals.

In addition, when we see where our money is going each month, we will likely consider the time and effort which goes into earning it. We should examine how our expenses serve us. How each purchase adds value to our lives (Dunlap). Could a dollar be redistributed into something else, adding deeper value to our everyday life?

There are some expenses we don’t have as much influence over, such as rent, mortgage, utilities, or groceries. These things we need each month to live. Aside from what we need to live, think hard about where the rest of your money is going and how those expenses benefit you.

Bottom line, the budget allows us to reevaluate and pivot. We can design the life we want using the budget. It empowers us and gives us clarity.

When organizing, Marie Kondo considers the value and joy a possession brings to her life. Let us take inspiration from Marie and ask ourselves, “does this expense add joy to my life”? “Do I truly want the newest, biggest, shiniest thing? Can I extend the fulfillment, happiness, or value I get from an item or experience?”

Instead of asking ourselves “how” to budget our money, ask “why”. The “why’s” are what drive us (5 Smart). Understanding what motivates us can aid us in creating clear, achievable targets for our budgets and other financial goals.

Lastly, be kind to yourself.

Implementing a new budget may take time. Be patient as you settle into your new routine. Reflection is just as important as planning. Once you have a few months of history to work from, reflect and determine your path forward that gets you from point A to point B.

As always, we are happy to be of service. Whether it’s helping you craft your budget, guiding your plan forward, or anything in between, we are here.

From the Desk of Sirra Anderson-Crum FPQP™

www.tenbridgepartners.com / (971)277-1077

 

Works Cited

5 smart budgeting tips for first-time savers. N26. (2022, November 23). Retrieved March 27, 2023, from https://n26.com/en-eu/blog/budgeting-tips

Dunlap, T. (2023, January 31). Managing Money in Your 30s with The Dow Janes. broadcast.

The information contained in this correspondence is intended for general educational purposes only and as a means for facilitating a conversation. Please consider our door always open to discuss your particular situation and how this information might benefit you and fit your specific needs.

About TenBridge Partners

TenBridge Partners is an independent financial planning and investment management firm based in Portland, Oregon with a simple focus of honoring the fiduciary responsibility of putting clients first.

Planning is central to everything we do. Our focus is on a complete understanding of a client’s and potential client’s needs through the financial planning process, before we move forward with anything else.

We bring clarity and confidence to an otherwise confusing financial world.

We are about people.