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Saturday, March 2, 2013

Who's Afraid of the Big Bad "B" Word?

Some of us seem to be so scared of the Big Bad "B" word these days.  No...I'm not talking about BANKS, I'm talking about BUDGETING.  
 
Some of us equate Budgeting with Dieting; and the reason why we may fail at Dieting is because we feel like we are going to DIE of starvation.  But, If we "DIEt the right way by eating 5 – 6 smaller meals a day, we will always feel full.  The best advice for a new and successful Diet is to start with small changes and gradually do more to change our eating habits and execute an exercise regimen.  Next thing we know, we realize that this is not a DIEt...this is a new Lifestyle!  Congratulations!
 
This same concept is relative to Budgeting.  Budgeting is putting our Spending on a DIET.  The best and most successful Budget (Diet) is to start with small changes in our spending habits.  For example:  Instead of going to the vending machine every day for your midmorning snack, bring a small bag of wheat thins or baby carrots to snack on; or instead of going to a restaurant for lunch, make your lunch at home or pack up your leftovers from the night before and take it to work with you.  These small changes will save you a nice chunk of change and probably a few pounds if you did this for a whole week.
 
Before we start any new BUDGET or Spending Diet, here are 9 things that should be done to ensure success!!!
 
#1. Establish your Financial Goals. 

Where do you want to be financially in 30 days, 3 months, 6 months, and 12 months?  This only sounds hard but it's really not.  We do this mentally all of the time but we just don't write them down.  For example:  In 30 days, my Goal is to reduce my spending by $100 or more. In 3 months my Goal is save $300 or more. Keep your Goals S.M.A.R.T. (Small, Manageable, Attainable, Repetitive, and Timed).
 
#2. Assess where you are. 

Before you build your Budget, do a Spending Diary for up to one week. Write down everything you spend money on, regardless how small the amount. Do this on a daily basis to get an idea of exactly how much you are actually spending and what you are spending your money on. You'll be surprised how those $0.60 bags of chips, 2 times a day for a week, adds up.
 
#3. Determine areas of change. 

Look at your Spending Diary and determine what can be modified or eliminated without it feeling like you are on a Restrictive DIEt. Think BIG but start with small steps.  This is marathon not a sprint!
 
#4. Build your map towards your Goals. 

Write down the steps you need do towards reaching each financial goal. Again, be S.M.A.R.T. about it!  Sometimes we get selective amnesia, so it may help creating an electronic Financial Vision Board and place it in different areas around the house and at work. (PLUG: Make sure you sign up for my Financial Vision Board Class!)
 
#5. Take those small steps ASAP!!! 

My mother used to say, "I'm going to start my diet on Monday!"  She said that every Friday for years.  Execution is Key!  How do you eat an Elephant? ... One bite at a time.  Again, "Think BIG but start with SMALL steps."  Then, gradually do more. 

#6. Get a Budget Coach. 

Share your Goals and Plan with a financial success coach that you feel comfortable with, respect and will take their advice when necessary or required.  This person will assist in holding you accountable to meet your goals and be there to help you get back on track if necessary.  (PLUG: Contact me, Madam Money, to be your Financial Success Coach. I would love to help you with your new Money Management Diet.)


#7. Reward Yourself. 

Make sure you reward yourself at least once a month so that you won't feel deprived.  Don't overdo it with a Shopping Spree.  Rather, set aside money every paycheck for that new outfit you want or those gorgeous shoes you have to have!!!  Hint: If it is that Flat Screen TV you were about to get a loan for...STOP!!!...build it in your budget and save up for it.  Trust me; they will have more TVs when you are able to afford it.  It might even be on sale by then.


#8. Get a Credit Check Up! 

Get copies of your credit report from all three credit reporting agencies (Equifax, Experian & Transunion) to see what is being reported to make sure everything is correct. If it’s not, make sure you dispute it. Get your free copy at www.AnnualCreditReport.com.
   
#9. Don't be so hard on yourself. 

Give yourself a break!  Reaching your goals will take time and consistency.  So if you fall of the wagon ... dust yourself off, get back on, and begin again.  Trust me, it’s ok!
 
I am excited about your financial future and am available to assist you through this process!