It Starts with a Budget

    Family Financial Housekeeping

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    1507_Finance_1The bottom line for success in your financial house boils down to one word: budget. More specifically, know your monthly budget and the numbers that make it up.

    Now, I’m not talking about the easy figures, like the mortgage, power bill, car payment, and insurance. Those are things that recur, so it’s simple to keep track of them. I’m talking about the bills that make you say, Ouch! New tires, prescriptions, extra stuff for the kids and boy, do all those unexpected items add up.

    Then there’s something I call the end-cap expenditure.

    You might recognize these as big-store, end-of-the-aisle-$19.99 deals that call your name. Or maybe it’s those red-tag-take-another-thirty-percent-off items that beckon you to take them home.

    Usually it’s something you’ve
    really needed (okay wanted) for oh so long – like the last fifteen seconds. And of course, the deal is incredible, or the bargain is just too good to pass up! So you succumb, once again, and by the end of the month, you’ve dismantled your budget – one unbelievable bargain at a time. When it comes to this type of discretionary spending, we tend to walk around in an unconscious or a semiconscious state. Marketing ploys at the grocery or sporting goods store, giant wholesaler, or the ones flashing on our computer screens rob us of the joys of money management.

    So how can you get on track? Here’s one strategy. First, identify one short-term desire – for instance, a weekend away for you and your spouse, or a computer upgrade for the family. Your goal becomes saving $350 within a certain number of months. A shared desire becomes a practical tool to help you stop unconscious, unnecessary spending. Thereafter, every time you’re tempted to pick up something not on your list, you can remind yourself that the $19.99 will have a more meaningful, long-term impact when applied toward your goal, versus
    an impulse purchase.

    By establishing an attainable goal, in a short period of time, you’ll be rewarded and encouraged to continue the process. The keys are recognition and control, which you develop once you decide to spend money smarter and with purpose. This practice not only supports a family budget and provides for future fun, it also creates accountability and fosters team spirit. The realization of a reward helps you want to repeat the activity of budget-keeping and savings-building.

    It’s important to note that this practice relies on shifting attitudes more than shifting money. What do most of my clients say when they accomplish this several times in a row? We had no idea how much those things were robbing us. Impulse spending was harming long-term relationships in our family. 

    Becoming conscious of cash flow and its link to monthly budgeting – as well as working together for savings – can have a positive impact on your quality of life. Likewise, your children learn how to be good stewards of limited resources.

    So this summer, establish a plan, work toward a goal with special rewards, and watch your attitude and habits shift as you truly gain control of where your money goes. Before long, you’ll discover budget doesn’t have to be a bad word.

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    Angie Shay
    Angie Z. Shay has worked in the financial services industry for more than 22 years. She is president of THE PATH Financial Strategies, LLC. Angie Shay is a financial adviser with Eagle Strategies LLC, a Registered Investment Adviser and an indirect wholly owned subsidiary of New York Life Insurance Company. THE PATH Financial Strategies, LLC is not owned or operated by Eagle Strategies or its affiliates. Neither THE PATH Financial Strategies, LLC or Angie Z. Shay provide tax or legal advice.