Making a budget that works is a struggle for most of us. Many have come to the conclusion that budgets don’t work, so we default to the pay-as-you-go mode. Making a budget that works is not rocket science. It is simply a matter of aligning how we spend money with our personal goals.
This is where most of us run into problems. We have no clearly defined goals or sense of direction. We simply take each day, week, and month as it comes, doing what others around us are doing.
Without financial goals, it may be difficult to muster the focus and discipline required to make your budget work. If you do not have a strong enough why, it becomes difficult to go through with the process. We simply give up at the first sign of resistance and setback.
When there is no compelling reason to save, you will always default to spending first and trying to save the leftovers. Your reason for not saving becomes very valid in your eyes.
Making a budget that works basically involves aligning your spending with your financial goals. If your financial goal for example demands that you save N5,000 per month. What you need is to muster the will to back up your plan by taking out N5,000 from your income and living with what is left. If you run a cash-based economy, consciously cutting out the use of credit cards for the purchase of consumer goods, you effectively put yourself in a position whereby you have to make do with what you have.
Saving before spending is paying yourself first. When you take your savings out of circulation, the risk of spending it is nil. You have in effect ring-fenced your savings. The risk of overspending is close to nil as there is nothing to overspend. You have no choice but to make do with what you have.
When you set up your budget this way, you won’t struggle to make it work. You are like the army that burned their boats after traveling to war in a faraway land. With their means of retreating up in flames, they are left with no choice but to win the war. It becomes a do-or-die affair. This is what happens when you buy in totally to your goals and dreams.
