By: Robert Swift
Over the last 18 months as The TCI Foundation has gotten up and running, I find myself thinking and learning more and more about budgeting…..boy, I never saw that coming!
As I hang around with Laura Walton, our Executive Director and professional budgeter (yes, I declare that is a word), as well as teaching and meeting some extraordinary people every day, the positive correlation between ANY level of budgeting and financial success is very clear.
Now, my particular strengths are not exactly the details of budgeting (Laura’s world) but I certainly can speak to the three most powerful takeaways of the best budgeters I have met.
1) Top budgeters place saving/investing, regardless of the amount, as part of the fixed, non-negotiable category……like mortgage and utilities. As Warren Buffett says, “Don’t save what is left after spending, spend what is left after saving.” Good advice from a billionaire still living in the home he bought for $31,500 in 1958.
2) It appears to me that most people who don’t do well on the budget side usually have a very liberal use of my favorite overspending rationalization. “Well, I deserve to eat out tonight for all my hard work and budgeting.” The problem is not the concept of a reward; it is the frequency and size of the reward that gets abused. It is not unlike the person attempting to lose weight who has the “reward” dessert after their workout negating all their hard work. It is silly, if you think about it, to “reward” yourself with the very thing you are trying to fix.
3) My biggest epiphany and frankly, the easiest category to find meaningful amounts of savings dollars, is food and drink. When people are diligent here (and I don’t mean recycling coffee filters!) the dollars available for savings and investment are incredible……$100-$400 per month and more. (By the way, I have noticed that this is a very large expense for young people these days.) And, when we focus on spending less on food and drink, we get the extra benefit of getting healthier…..Win-Win!
Well, there you have it, an article I thought I would never write! Maybe I will change my name for this week only to Bobby Budget…it’s got a nice ring to it.