Student LoansAs sum­mer draws to a close and kids get back to school, it’s a good time to dust off our per­son­al finances.  You aren’t alone if sum­mer­time has had you pay­ing less atten­tion to your bot­tom line. For many folks it’s not uncom­mon to get a bit out of touch with spend­ing. Vaca­tions, trips to the pool, frozen snacks, it all adds up. While it may seem eas­i­er to be an ostrich and keep your head in the sand, this time of year is a prime oppor­tu­ni­ty to con­sid­er our future goals while sim­pli­fy­ing our lives and tak­ing charge of our finances. It also puts you on good sol­id foot­ing going into the upcom­ing hol­i­day sea­son where expens­es can again get away from us.

One of the best ways to accom­plish this is to cre­ate a bud­get or at least a way to track your expens­es.  This will require an ini­tial com­mit­ment of time, but the div­i­dends are high!  Spend some time on an upcom­ing week­end plan­ning for your future (maybe bet­ter pre­pare for that trip next sum­mer) and learn­ing about your spend­ing habits?

It’s easy to get off track with­out a bud­get.  For exam­ple, when I go to the gro­cery with­out a list, who knows what I might end up with.  “How exact­ly did Tim­bal­lo di Pic­cioni end up in my cart?”  I can’t even pro­nounce it let alone spell it!  Mak­ing a list keeps us on track to do and buy the things that are nec­es­sary in life.  Just as hav­ing a list will keep you out of the exot­ic food aisle at the gro­cery store, a bud­get can help you avoid miss­ing a vaca­tion or get­ting into cred­it card debt.

Start your bud­get by mak­ing a list of your expens­es.  Some things like the gas bill or the cable bill are easy to find in your check­book reg­istry or online bank state­ment each month.  The expens­es from the local gro­cery could poten­tial­ly be bro­ken down in a dozen dif­fer­ent ways, but for most of us a trip to the gro­cery isn’t “Enter­tain­ment.”  Sim­ply label the cat­e­go­ry “Essen­tials” or “Gro­cery” and be done with it.

When you find your­self at the end of the list after Essen­tials, Mort­gage, Vaca­tions, and the dog­gie day-spa you might real­ize that some­thing is glar­ing.  It’s that gap between your income and your expens­es!  Rec­og­nize that gap as an oppor­tu­ni­ty.  Care­ful­ly deter­min­ing where your mon­ey went will help you see where it could have tak­en you!

Here’s an exam­ple of how it all works.  A client came to see us a few months back for our Pros­per­i­ty Plan­ning™ ser­vices.  We will call her Mary.  Mary need­ed to save more mon­ey today in order to suc­cess­ful­ly have the retire­ment lifestyle she desired.  The dilem­ma Mary faced was that when things were said and done at the end of the year, every­thing that went into her wal­let had gone back out.  Unfor­tu­nate­ly Mary could only account for about three-quar­ters of the dol­lars she had spent.  By cre­at­ing a bud­get she found the mon­ey she need­ed to pros­per dur­ing her retire­ment years.  Now Mary is on track and look­ing for­ward to some amaz­ing years ahead of her.

Anoth­er way to sim­pli­fy is to take an inven­to­ry of what you have but don’t real­ly need.  Let’s see, the new suit that was only worn once, an elec­tric coun­ter­top non­stick que­sadil­la cook­er (still in the box of course) and prob­a­bly quite a few oth­er items that were “great finds.”  In the end, the lack of bud­get­ing often leaves us a few pounds heavy and a few dol­lars short.

A bud­get cre­ates a bet­ter under­stand­ing of your per­son­al finances, and thus greater per­son­al pow­er to make the best choic­es for your desired lifestyle, both present and future.  It is okay if you occa­sion­al­ly stray from your bud­get.  Bud­gets can be intim­i­dat­ing, so I pre­fer to use them as a guide rather than a law so that you can appre­ci­ate rather than resent your new responsibility.

Final­ly, remem­ber that you are not alone.  Bud­get­ing can be a chal­lenge, but it is well worth the invest­ment of your time.  All of the dol­lars spent due to lack of bud­get­ing could have been put to bet­ter use.  A 10%, 8%, or even only 5% return can add up to quite a healthy sum.  It might mean a beach cot­tage or a sub­stan­tial trav­el bud­get when you retire.  It might even mean your child’s col­lege tuition.

So, take some and as the kids are get­ting back to work, you can too on your finances.  Weigh your options (elec­tric coun­ter­top non­stick que­sadil­la cook­er vs. beach house.)  Under­stand­ing your per­son­al finan­cial health can bring you greater joy today and tomor­row.  I think I’ll join you in review­ing my own bud­get this evening, just after I fig­ure out how to cook my Tim­bal­lo di Piccioni!



  1. Gath­er togeth­er your check­book reg­is­ter and cred­it card state­ments from last year.  Both of these are usu­al­ly eas­i­ly avail­able online.
  2. Eval­u­ate your budget’s com­plex­i­ty.  Do you need a soft­ware pro­gram like Quick­en and Mint, or will a sim­ple spread­sheet or pen­cil and paper do the trick?
  3. Cre­ate per­ti­nent yet sim­ple cat­e­gories for your expens­es.  Make enough cat­e­gories to mon­i­tor your spend­ing with con­scious choic­es, but not so many that record-keep­ing gets complicated.
  4. Mon­i­tor your bud­get no more than once a week.  Over-mon­i­tor­ing may lead to bore­dom, con­fu­sion, and ulti­mate­ly the demise of your bud­get­ing system.
  5. Chal­lenge your­self to meet those bud­get goals you know may be tough.  Con­sid­er build­ing rewards into your process to con­grat­u­late your­self for stay­ing on track!