Let’s be honest. What’s the first thing you think of when you hear the word ‘budget’? If you’re like most people you hear “restriction”. While the word is in our name and really what we do in a nutshell, the stigma behind budgeting is very far from what we do. Until we can change the world’s connotation of budgeting, we will hate the word. (But if we didn’t use it you and the world would have no idea what the heck we do.)
If not “budget”, then what? Here at ELP Budgeting Services we like to call it “a financial plan broken down monthly”. See, the misconceptions about budgeting correlate to the ineffective foundations of most budgets. A budget should be a financial representation of financial goals. Unfortunately, most budgets are really just a plan for spending without a plan to achieve financial goals.
Why do people budget? They budget because they recognize their spending is related to financial wellness. Chances are they would love to own a home, become wealthy through investing, or simply stop living paycheck to paycheck. The next thought is often, “I need to get on a budget and stop doing everything I am currently doing with my money to achieve these goals.” There goes that whole restriction thing we hate.
Achieving financial goals does not mean stop living, stop enjoying life and hide in a hole to avoid spending money to achieve financial goals. Yes, at times it will take sacrifice but our approach maintains quality of life for our clients. Our client’s budgets are made with their financial goals in mind; however, we do not neglect quality of life. We are not about restriction. Have you ever tried to diet and just the thought of everything you can’t eat made you quit? Restrictive budgeting is the same way. If you think that as long as you are pursuing this certain financial goal, you can’t get your nails done or go on vacation, you’ll abandon the budget on the first hard day.
So let’s break down this “financial plan broken down monthly” thing. Let’s say your first financial goal is to save for a home. Your “financial plan” is centered around saving for a down payment and closing costs; for example, $24,000. To make things interesting let’s add the time constraint of one year to save for the home. The budgets we love and curate, would break that $24,000 into 12 months. Simple math says, the client needs to save $2,000 a month to achieve the goal within the time frame.
We know what you’re about to say. “What if I can’t save $2,000 a month?” Some would give up on the financial goal completely. Some would scale back on their goal and eventually compromise so much it takes years to achieve. ELP Budgeting Services clients would see how we work that financial plan without restriction and within reason. In the first month our proprietary code might weigh groceries as less important than house savings and cut back 10%. In the second month we may decrease eating out by 15%. We avoid cutting out expenses 100% right off the bat if possible. Remember we don’t like restriction or the world’s idea of budgeting. What we do love is a financial plan that sees the big picture and breaks down goals into reasonable, quick-win months.
Check out Bernadette’s testimonial about her new home purchase “financial plan broken down monthly” here! https://www.instagram.com/p/CDOhEciFXPu/
Have we convinced you that the way everyone else uses the word budget is not how ELP Budgeting Services uses the word? We hate their “budget” but we love our “budget”. What financial goals do you have? How can we break them down into monthly manageable chunks? Overwhelmed? Let us do the heavy lifting.