Ignorance is Not Bliss
The benefits of routine budgeting
For many of us, just hearing the word budget can send us running. We like to skip over it on our monthly to do list (if it was there in the first place). Oops! I mean why budget when you could do something else … anything else?
We know that we will not be able to unsee the truth of whatever we discover about our financial health. However, like so many maintenance tasks, the hardest part of budgeting is actually sitting down to do it.
When you sit down with a financial planner to budget you learn quite a bit. You see what lifestyle you are living and if it is within your means. You adjust your budget to suit your income, including non essentials albeit compromising will often be necessary here.
“What’s more important to me right now, my gym membership, which I’m sure to get around to using, or having a few bucks to go out for drinks at the end of the week?”
We often think, I need to make more money but sometimes it’s just a matter of where we are allocating our money. The funds dedicated to the seemingly inexpensive subscription we never use can be redirected towards our groceries or being able to stop in at our favorite coffee place in the mornings.
There is no one size fits all budget and that is the beauty of it. A financial planner helps you map out the essentials first (food, bills, transportation etc.) and then from there they will help you determine where you want to spend your money.
Wait! There’s more, you also have the opportunity to map out your future. Maybe you are at the end of your academic career with nice job perspectives. Your head might be boiling over with ideas about the future: traveling, children, moving etc. With the help of an advisor you can have a reasonable idea of your financial outlook.
Say you have two different job opportunities and one pays less. The choice seems obvious. However, after looking at costs and perks associated with each offer you realize that you would have more to save, or spend, at the end of the month if you took the lesser paying job with the shorter commute and the free gym membership. This is just one example of how having a clear image of your finances can aid in your decision making and shape your life.
Making it a habit
So you go in and sit down with an advisor, you have an overview of your spending habits and your short-term and long-term financial goals. That’s it, you’re done right? Not exactly, there’s more to it.
The first time you budget your day-to-day life can be an arduous and intimidating experience, even with the guidance of an advisor. Financial wellness, much like your physical health, is an ongoing process. If you keep an eye on things you have a chance to make sure everything is in order and make adjustments to prevent future troubles. However, if you go the route of If don’t look it can’t hurt me' you will set yourself up for unpleasant surprises.
Over time we undergo changes, expected and unexpected, in our health, work and personal life. We have to make a habit of being conscious of these changes and adjusting our budget respectively. Whether you sit down gleefully each month to check on your spending if so, congratulations you are the exception or you have banned the word finance in your home, a budgeting session with your financial advisor is a must! When it comes to your finances, it’s always better to be informed. Take a glance at the short checklist below to see if you have a handle on your financial health!
Financial Health Quicklist
Do I have a suitable budget?
Am I respecting it?
Do I have a specific time of month dedicated to reviewing and adjusting my budget?
Do I need help with my budget?
Do I have unanswered questions about my finances?
If you are unsure of your answer to any of these questions, if you need help with your finances or more information about finance and budgeting now is the right time to set up an appointment with a financial advisor!
