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HMM 94: The Real Misunderstanding Behind Budgeting Which No One Talks About

Budgeting is a common topic and usually the conversation around it always boils down to how it is so restrictive and overwhelming.

In this episode I’m going to dive deep into the real misunderstanding behind budgeting which no one talks about.

 

What you’ll learn about in today’s episode:

  • The common misconception of budgeting
  • The 4 stages in your money journey and how that translates to your budget
  • Behind the scenes into how many iterations of budgets I have gone through

The Misconception of Budgeting

Contrary to popular belief, BUDGETING is not about restricting yourself. It is about creating a plan that you are happy with and you and only you are in control. The budget is the plan, not the action.

The 4 Money Stages

Stage #1: In complete chaos

This is the most frustrating stage, and where most people get stuck. At this stage you have tried multiple times to get your money under control with little to no success. Something always seems to get in the way. Giving up is common until the next inspiration strikes again to do something about the money. This cycle tends to repeat itself unfortunately until you have that “aha” moment that moves you forward.

Budgeting Intensity: NON-EXISTENT (but very much needed)

Stage #2: Starting to get clarity

In Stage #2 you get inspired by something that you read, listen to or learn. You begin to budget and taking more action than ever before, but this time you are committed and confident with the progress you are making.

This is the most critical stage because the money stories and confidence you have in this stage determines if you fall back to Stage #1 or go to Stage #3.

Budgeting Intensity: HIGH

Stage #3: Establishing systems in place

This is the stage where you have clarity on your money going in/going out, you have a proper budget and you are ready for the next step.

You start establishing systems whether it be a cash envelope system, a virtual envelope system or a mix of the two. This system keeps you in check so you are feeling much better about your budgeting in general.

Budgeting Intensity: MEDIUM

Stage #4: Systems are in place and working like a charm

This is the stage where you are super excited about looking at your money. You have systems in place that are working smoothly. Sometimes you find yourself making tweaks but you don’t find yourself overwhelmed with it.

Budgeting Intensity: LOW

My Many Iterations of Budgeting:

  • When I was in college I literally had very little money to my name so literally every dollar that came in from my waitressing days went for rent, bills, food. There was no saving involved here.
  • When I got my first full-time job before getting married, I actually lived at my parents home which was a huge help. That is when I got my jump start on savings. I was of course putting away money for retirement, regular savings and paying the car off as fast as I could.
  • When I got married, I upgraded my budget to a checklist. Newsflash – a checklist is not a budget. It showed the income and expenses, plus I was saving like crazy, but there was no strategy or goals in place. We were just doing what I thought we were supposed to. We found ourselves borrowing from our emergency savings constantly because our spending was out of control.
  • At one point I started to use a spreadsheet, but I allowed myself to get confused with the different categories. When they didn’t match exactly, I threw up my hands and that was that – back to the checklist. Finally I realized that this checklist was still allowing the extra money to disappear.
  • Years later, I can clearly remember when my big aha moment hit, we were yet on the road again to yet on another move, that was back in 2012. It was actually after reading Dave Ramsey’s Total Money Makeover. Even though I didn’t fully implement his system, I took what really resonated with me and went to work. Years before that I had read one of David Bach’s book which helped me skyrocket our savings. When I started really budgeting and implementing a system that is when things changed for us and here I am.

Notice I have been through all these stages myself. Yes I’m in stage 4, but guess what? With our many moves, or when income changes, I go back to my spreadsheet, adjust and make any tweaks that are necessary that keep us in check with our goals or if possible gives us a boost forward.

What stage would you say you are in?

I hope sharing my journey helps you to be ok with this not being an overnight process.

Remember:

A budget is a plan that you are completely in control over, but on it’s own doesn’t do you any good. That is why you need a system which would be your cash envelopes, virtual envelopes, or a combo of the two.

There are 4 different stages that you will go through which translate to different budgeting intensities.

You will go through various iterations of budgeting and even the systems you use, and that is completely ok.

What You Can Do:

If you have listened to this episode and are thinking that you are tired of doing this by yourself, I would be honored to help you. If you are content with your income but not your bank account, we can chat about your particular situation and then together we can figure out if we are a good fit to work together. If we are not I would be happy to point you in another direction that would better suit you.

You can schedule your appointment by going to: www.jenhemphill.com/session The slots for coaching clients are first come first serve. So if you are listening to this particular episode at a later date there may be a chance that the slots are full for coaching but I’d be happy to put you on the waiting list, and we can discuss that during our chat!

Listener Shout Outs!

A big shout out to Theresa and Kelly for being vulnerable and reaching out for support. If you are stuck something you don’t have to do it on your own, reach out for help.

I also want to give thank you for everyone who chimed in on the title of my book. Yes you heard right, I haven’t announced it yet on this podcast but if you are in the community you have heard about it.

Yours truly is writing a book, I got approached by a publisher last year and here we are. What is crazy is I always felt that I had a complicated relationship with writing and this happens. I am embracing it and am grateful, know this book is all meant to help YOU.

Resources:

David Bach: Automatic Millionaire **
Dave Ramsey: Total Money Makeover  **
So Money Podcast by Fanoosh Torabi

**Please note the link is an  affiliate link so I may receive a small commission if you purchase**

 

I want to hear from you!  What was your favorite takeaway from this episode?  Please share in the comments below or come on over to our community and share with us there.

Abrazos + Much Love,

Jen

 

P.S. THANK YOU for listening!

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**Please note I love to give shout outs to my listeners, so if you’d rather me not mention your email message or play your voicemail on the show be sure to clearly state that, thank you!**

 

 

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