003. Budgeting as the key to not only grow wealth, but to keep it.

Budgeting is frequently associated with an unpleasant task to do. But it absolutely does not have to be that way.

Once you set targets, it is actually fun to update your budget because it helps you check how close you are getting to your goals and that feels exciting. 🎉

How Budgeting became a second nature to me 

Budgeting is a skill I learned in my teenage years from my mom. She is a master budgeter who has made out of a normal income amazing things. Really amazing.

When I started going to university, my mom assigned me the task of managing my allowance, which was limited and, given the major effort my parents were making to pay for my university studies (despite of my partial scholarship), I did not have a face to ask for more, so I needed to make it work with what I was given. As per ideollogy of my parents, I was not allowed to work so I could fully dedicate to study and make the most out of that deep learning time.

I started budgeting on a notebook. Yes, with paper and pen. And I used that method for years, before I fell in love with Excel :D

Every time the allowance came, I had to distribute the funds into the different categories in my notebook, which fullfilled the needs I had at the time, like:

• Gasoline for the car
• Eating out
• Clothes
• Makeup
• German classes
• Savings

As I was living with my parents back then, I did not have the major expenses as housing.

At the beginning, this was a tedious task to do, but the more I did it, I realized it really helped me to not losing track of my money and use it for the purposes I pre-defined in my budget without running out of it unexpectedly.

I have repeated the process and modified it as my personal finance knowledge grows and my goals become clearer. I continue doing it every time I receive my income from my 9-5. I can say that it became a habit to the point, that if I receive my income I can feel extra unconfortable if I do not distribute it to the budget categories in the same day the income arrived or latest the day after.

Why does it feel so uncomfortable? Because I do not feel in control on where the money is going.

Budgeting can transform your Finances

 "You can´t improve what you don´t measure" - Peter Drucker

A budget is the ultimate tool to break down from living paycheck to paycheck and unlock your wealth creation journey, even without increasing your income.

Why?

Because it helps you track where your money is going with high degree of accuracy. 

Your budget can show you where your priorities really are and they can be different to the ones you think you have. It is mindblowing!

Why?

Because numbers do not lie. On an everyday basis, we can easily loose the track of where we spend our money. Just 10$ here, 15$ there and suddenly, all the money is gone! or even worse, there is a big balance in the credit card! Have you ever found yourself in that situation? Probably yes, most of us have and it is normal to loose track from time to time, but only if it happens from time to time. 

If not tracking your money becomes the "rule", there is no control on where to put it and therefore, there is no possibility to strategize it in a way that it helps you achieve your goals.

Long story short: you need to keep track of your money. 

Once you start tracking your money, it shows you how on track you are to achieve your goals (which you can set on a yearly basis).

Strategizing your money to achieve savings or investing goals becomes easy, when you have your money tracked and can adjust in "non important" areas to free money to be moved towards saving and investing. This is how you actively strategize and adjust.

Where to start?

Depending on your personal preferences, you can track your money on:

• A notebook
• An Excel spreadsheet
• A budgeting app

For me personally, I find it super easy and helpful to have it tracked in an Excel spreadsheet. It is just easy to use for me.

Yes, it requires you to update it every month in what I call "Money Date". But trust me, it is all well invested time because girl, you are building wealth here. Have you heard that where your attention grows, energy flows? Take your time for your wealth creation. It is an investment for yourself.

If you want to start your budgeting today, I put together this Monthly Budget Template for you. 

It will help you keep track on these 5 categories:

1. Income
2. Savings
3. Investments
4. Debt repayment
5. Expenses

All the money you receive in income will have a label on it to serve a specific purpose for you. 

The template also provides you with an annual view of your money.

Do you know which percentage of your income you targeted for savings, investments and expenses?

Well, easy to answer with this template. 

Learning about this percentages can be shocking, honestly speaking, because you can clearly see where you stand at.

You can also set annual targets in the Dash Board and monitor how close/far you are during the year to achieve them.

Do you aim to save 15% of your income or invest 15%? Easy to measure with the help of the Monthly Budget Template 

Choose the budgeting option that suits you best, notebook, spreadsheet or app. The point is to benefit of tracking your money.

Spend with intention

A missinterpretation of Budgeting is that it is understood as a way to constrain your behavior with money.

I am here to tell you that this i not the case. A budget is not here to constrain your money behaviour, but to help you place your money with INTENTION, in the areas most important to you.

It is common, that we spend our money in areas we actually do not care so much. Sounds counterintuitive, but it happens! Maybe items we buy out of habit, or boredom, and the money is just gone.

What we want to build together is INTENTION with MONEY. To place it in areas that are the most important for you.

That is it for this blog post. I feel like talking to you on a coffee chat on an evening. I enjoy it SO MUCH, and hope you also enjoy it reading the blog too.

Any question or comment, remember, I am one DM away @doloresgavino

See you on the next post.

Dolores Gavino

Female Wealth Builders Founder