Financial Security - Establish a Budget (cont.)
By Ed
O'Neill
You have to establish a budget. The first goal is to pay off this debt. How? Let's bring that bad word back into the mix…Diet. A budget is nothing more than a financial diet.
Different diets work for different people so the first budget you establish for yourself might not be the best one. You have to sacrifice things that are difficult to give up in order to meet your goals. If you are not disciplined you may reach the goals but not sustain them for a consistent period of time.
First, write down your monthly bills that you have to pay. New shoes is not a have, it is a want. I am just trying to help. If your income is less than your total of monthly bills, you are in critical condition and you might have to swallow your pride and ask for help from the ones you love, family and friends. You have to get rid of the items that would not effect your income first, and even consider moving to a cheaper location at least until you make more money.
For those that can pay their monthly bills, it is time for your financial diet. No diet is successful if you just stop eating. Actually the most effective diets allow for a bad day or at least a bad meal once a week. So make a list of discretionary spending. Please remember, realistic goals have to be put in the plan and cutting out all discretionary spending is not realistic.
Now prioritize it in a form of importance. Now prioritize it by the frequency and amount. Do you golf five days a week at $50 a pop or get a haircut once a month at $250 a cut? It could be a lot to some and not enough to others. But if you are alone making this list and are embarrassed to put down the real amount you spend on an item, you already came to the conclusion you have to cut it down. This is where the first commitment comes, if you go to cut it down or out, it is a lifetime decision. It is not for a few weeks months or years; it is controlled and conquered for the rest of your life. I think if you realize if this is accomplished in one’s life, it might shine a new light on why there is such an importance on a budget.
True wealth only begins when one budget’s, cuts down expenses, pay
off all credit card bills and always has control over them. This is a
big commitment and if you refuse to take on the challenge, you can
always be a jolly, overweight free spender. As they say, I can’t change
you…only you can change you.
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Ed O'Neill is President of EON Wealth Management and can be reached at edward.oneill@genworthrr.com and at www.eonwealthmanagement.com.
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