Most would begin with a focused look at a highly detailed list of expenses and set up a budget that involved cutting out “extras”. I roll my eyes and shake my head; this is like saying to the overweight, “eat less and exercise more”. This only helps those who have no idea they have spending problems. Awareness can be helpful and if you have NEVER thought about looking at how you spend your money then by all means stop being so clueless and setup a basic budget. However, this is not the problem for most people and is a fruitless exercise for those who know exactly what the real problem is: they don’t make as much money as they spend. Will cutting out “extras” make them less stressed and happier about their finances? NO, No, no a thousand times nooo… Everyone wastes money, but defining what is a foregoable expense without sucking the gooey filling out of your donut involves not letting others squeeze YOUR donut, or in other words, you can’t compare your guilty pleasures to others. They don’t get to decide what is valuable to you and you don’t get to justify keeping up with the Jones’s by spending where it doesn’t please you. The road to financial independence begins with the realization that you spend more money than you make and you are not happy about this. You can cut back on how much you spend and if done correctly this can give you some breathing room, especially if you like your job and don’t want to do something else. If done to a barebones, make it fit ugly stepsister style, it can make you miserable and be more like a finger in a dam solution to your leak. Not ideal and not good at all in most cases.
My idea of budgeting begins by looking at expenses you resent, not your guilty pleasures. In fact I say if you feel deprived and find you overspend or over eat, MEASURE or BUDGET your dessert out in a proper portion and eat it first! The very next thing you must do is ask yourself if you really resent the paycheck to paycheck cycle or just the size of that paycheck. If you find you simply need a bigger savings account and to make more money then get started on options to make extra money and cutting back on your expenses, just cut the things you resent the most first and spend that money on dessert; it will make life a little sweeter. If it is the idea of working to make someone else rich or make their dream happen, be it an individual or a big board of directors you will never meet, then the solution is all about becoming an entrepreneur. It might take time to build something up into an income flow large enough to support you independently and you may have to work at it while you keep the job you don’t like, but it is worthwhile (done with the right business plan).
Keep in mind that looking for your destiny in life, your dream job, or the perfect fit to fulfillment may not be connected at all to a goal of financial independence. You might make all you money running a business that barely interests you at all. You could own a gas station, car wash, vending machines, or drycleaners. The business is not a fulfilling calling, but it makes money and leaves you answering to no one but yourself, so you can pursue your calling in life that may or may not make much money at all. If you love your low paying job, for example, teaching, then something like owning your own business on the side, be it big or small, affords you a few little luxuries in life, like a retirement plan and helps you not resent the grind that can settle in between vacations.
Check out Where Rosemary takes budgeting link (sorry still working on this section for the blog but will be a link 🙂