I know “budget” may seem like a dirty word. For many, it means you can’t spend money on the things you want to spend money on. Some view budgets as a bunch of restrictions, unwanted controls and basically impossible to follow. You may think they suck the fun out of everything…

But today we’ll shatter everything you think you know about budgets, and give you a completely different take. It may be different than anything you’ve heard in the past… and that’s okay. (In fact, it may be a good thing!)

In truth, a budget is just a way for you to reach your financial, business, personal, relationship, and even health, goals. You’re probably saying, “Dani, how on earth can a budget help me reach my goals?”

Once you create your budget – and stick to it – you will be amazed by how it frees you to do the things that truly matter to you. Sure, in the beginning, it may be difficult. But I promise, if you stick to it and exercise self-control, you will reap the benefits!

There are a few steps in this process, but today we’re just taking that first step.

To get where you want to go, you must know your starting point. So today, let’s identify your financial habits. You need to understand the kind of financial decisions you currently make and, in the process, you’ll probably discover some decisions you didn’t even realize you were making!

So, grab a piece of paper, a pen, some highlighters and your bank statement. Make a list of the bare minimum you need to survive: housing, transportation and food. And then find out where your money is going. And I mean EVERY RED CENT!

Now, start highlighting every single expenditure:

• Yellow: Food
• Pink: Debt payments
• Blue: Necessities (rent, utilities, water)
• Purple: Gas for your car or other transportation costs
• Orange: Everything else (Yep…everything!)

Once you do this, your statement will look like a rainbow. Add up the expenses in each category, to see the totals. Then, go through each category and figure out what is a true necessity and what is a luxury.

Be careful, because it’s easy to label a luxury as a necessity. Let’s look at food, for example. The $5 coffee – is it a necessity or a luxury? Eating out (fast food, the deli, a restaurant) – necessity or luxury? Picking up something for lunch, because you forgot to pack anything for work – necessity or luxury?

It’s easy to get caught up in the emotional aspect of this. Maybe you don’t want to admit you spend $300 a month on fast food or $500 a month shopping online. You might be shocked by the numbers you see on your bank statement. Maybe you’re ashamed. As you go through this exercise, I want you to momentarily separate yourself from your banks statement. Be totally objective. Consider looking at it, as if it belonged to a total stranger.

Getting through this initial exercise may be hard, but this sets the stage for your financial future. As soon as you figure out where you’re starting, you will see what habits need to change and then you can turn and walk in the other direction – toward financial independence!

Add up the expenses that are real necessities. Everything else is “fat” in your budget. This is the extra money you spend on foolish things. This is where all your hard-earned cash goes! This is where you will find the money to annihilate your debt, go on your dream vacation, pay for your kids’ college tuition, build a home for a Nicaraguan family in need, or anything else your heart desires! Remember when I said budgeting is a way to help you reach your goals? This is why! Understand now?

Oh, and I almost forgot… you have some homework! Leave a message for me on our social media sites and tell me about your current budget. Do you have a budget? If so, do you stick to it? What is the hardest part of keeping a budget? Were you taught to budget or is it something you’ve had to learn as you go?

In great faith,

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