CHARLOTTE, N.C. — Building wealth isn’t easy but it is possible. The first order of business? Creating a budget you can actually stick to.
Lilias John is a financial consultant and the author behind the money management blog, yourfinancialstylist.com.
"Budgeting shouldn't feel like deprivation," John said. "It shouldn't feel like you can't have anything that you love. But whatever your one thing is, hold on to that and then make adjustments to your budget around it. Unless that one thing is the thing that's hurting you the most.”
Getting real about your relationship with money is essential to building wealth.
"The way people spend their money is very much tied to their emotion and it's tied to their history," John said. "What experiences did you have with money growing up? How did your parents spend money? What did you learn about money? Did you feel deprived? Did you feel like your family always had? And so that has a huge impact on how you use money when you have your own.”
John shared three steps to follow to create a budget you can actually stick to it.
- Write it out: Start with your savings goals then, list all monthly expenses and make sure to include spending money.
- Review actual spending: Gather bank statements from the last three months and review them in detail. Categorize each “spend” and add it all up. Does it match what you thought you were spending?
- Make adjustments and trade-offs: Once you have determined what you actually spend each month, adjust your spending to meet your goals. Set cash allowance for “spends” you categorize as extras so you can stay within the budget limits you’ve set for yourself.
The great news is you don’t have to do this alone. John runs a free Facebook group called The SuperSavers Club.