Budgeting for Success

 

We know the dangers of driving too fast on an icy highway. A vehicle can easily spin out of control and collide with other vehicles or anything that gets in its way. The consequences can be disastrous.  However, we can remain hopeful that the vehicle can recover and come to an abrupt stop with the occupant unscathed. Whether we are talking about “reckless driving” or “reckless spending”, both are the result of reckless behavior. 

I sometimes wonder if people choose to ignore the well-intended message, “live within your means” which warns them to spend only what they earn. Instead some replace this with a more fun piece of advice like “enjoy life while you can.” 

Although there is nothing wrong with enjoying life, I am certain that splurging beyond what we earn is not permission to do so.  Imagine taking a vacation we can’t afford, purchasing a vehicle with monthly payments we can barely make, buying more clothes than our closet can hold, or doling more toys on our children than they need.  What’s the point in enjoying life in this way when all this splurging leads to despair?   

As a financial planner, I meet with clients who are looking for a glimmer of hope to get back on track.  I have to admit sometimes their situations look very grave to the point that they require help from the Credit Counselling Society.  In either case, whether someone chooses to draft a consumer proposal agreement with their creditors or declare bankruptcy, both their credit reports and their lives will be severely impacted as a result of their actions. These are tough life lessons.    

I once heard a speaker share with her audience that you have to scare people before they will be willing to take the appropriate action. Reading through the details of a consumer proposal should be enough to scare you into realizing that you never want to travel down this road.

I truly appreciate that the Credit Counselling Society offers helpful advice in making a personal budget.    Their workbook, 7 Steps that will help you build a budget that works, provides the tools designed to create a spending and saving plan that ensures you find success in achieving your financial goals.

Maybe you don’t like to be scared into action, however if you need help determining  whether you are travelling down a slippery slope, spending more than you earn, consider these H-E-L-P tips.

H – Heed the warnings.  Look at your bank statements to identify whether the withdrawals are greater than the deposits. 

E – Excel at making the best use of your hard-earned dollars.  Only you can take care of the money that you have earned.

L – Learn about creating a budget that helps you work toward your goals.  

P – Promise yourself that you will stick to the plan so that you can enjoy life with the income you currently earn.  

Have you encountered any “h-e-l-p” tips that make sound financial advice? Please share.