Most everyone wants their financial life to be in order.   If asked, most would say that they desire a well-paying job, few bills, and extra money in their bank account.  So, we get good-paying jobs and try to make more money than we did the previous year, so we can pay off our bills and be able to buy what we want and save money.  But for some reason we still struggle to get ahead.

I truly believe that a major reason that many of us struggle with managing our finances is because we are too smart for our own good.  I know that sounds contradictory, but because so many have college educations and are well read, we believe that basic financial concepts and simple budgets are beneath us.  We try get-rich quick schemes, side hustles and overtime hours to get ahead.  But without a plan for our money it seems to disappear on things like eating out, impulse purchases, or every day needs that nibble away at our hard-earned money.

Warren Buffett made the statement that “an idiot with a plan can beat a genius without a plan.”  If you follow the personal finance gurus they advocate that every dollar in your budget should be spent on paper, on purpose, at the start of every month.  And for 12 years this is the philosophy that my family has used in managing our personal finances.  At the start of EVERY month my wife and I sit down and spend all the money that we will earn for the month.  What I mean is, on our spreadsheet we tell our money where it must go.  Because it is guaranteed that if we don’t tell it where to go, our money will grow wings and fly away, never to be seen again.

Each month we write our total anticipated income at the top of the page. Because we earn a salary this it is the same every month for us.  For those of you who work hourly and your monthly income varies, there are techniques to help you budget month-to-month.  Next, we list all our known, upcoming expenses for the month.  This is our house payment, insurance, power, water, phone, etc.  Then we list our groceries, going out, gas, clothing etc.  And finally, if our income is more than our out-go, we assign the extra money to goals, wealth building opportunities, vacations, and future purchases. We even save for Christmas gifts, because a few years ago we realized Christmas comes EVERY year.  The point is EVERY dollar has a name and is told where to go.

Creating the budget spreadsheet is easy.   Actually following the plan is what’s hard.  The way my family puts our budget into action is by using the cash method.   You might think the cash method is too old school and antiquated, but successful personal finance is 90% behavior modification.  The purpose of using cash is so that we will experience a negative emotion while spending money.  No emotions are felt when swiping a card but when tangible cash leaves our hand it tells our mind that money is leaving our pocket.  So, we pull out cash for items like going out, baby-sitting, groceries, clothing, and miscellaneous spending money.  I only use cash for the items I would accidentally over-spend on.   It is a proven fact that I have never over-spent on the water bill because it is not an impulse buy.  But, I have quite often over-spent while going out to eat or shopping at the grocery store while I’m hungry.  It is these items that I must keep in check and not overspend so that I stick to my plan for the month.

Once I finish the month and have successfully stuck to my budget, I do it all again, each month making a plan for my money and sticking to it.  At the beginning of the budgeting journey it was tough.  My amounts were incorrect and I would constantly make mistakes.  It wasn’t until probably 4-6 months into this journey that my budget became routine and I started seeing the progress I was making.  Debts begin to get paid off, vacations can be taken using cash, and retirement accounts slowly begin to accumulate in value.

The journey of personal finances is a long one.  Our working career is typically around 40 years, and if the desired path is one of financial independence we have to begin now, making a plan and sticking to it every month.   If you need help creating and sticking to a budget one of our NorthStar financial coaches would love to help you.  You can reach one of them a


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