Do you get overwhelmed with rigid budgets and financial advice? I know I do – and I love personal finance!
Our Personal Finances Change With Our Life
While I strongly believe that having a solid plan for finances is important, I find it reliving to recognize that finances change with my season of life.
I evaluate our overall budget at the beginning of every year. This takes into account hopes and dreams as well as concrete financial goals.
While my husband and I talk together about our overall finances, I put together the spreadsheet (because I love it) and talk it over with him.
I find it very helpful to evaluate our financial picture every year, and even intermittently if something comes up like a job loss or an unexpected gift of money.
Your financial picture is flexible
While you may have some concrete goals (being able to stay home with the kids, pay off the mortgage in a specific timeframe, etc.) the reality is that life is rarely that rigid and thus our budgets require frequent re-evaluation.
These are general ideas of goals that may come along with a particular season. Obviously, this list is far from exhaustive!
- Early Career – Many focus on getting out of student debt, credit card debt, auto loan debt. This is a great time to consider charitable giving.
- Established Career – Finish getting out of debt. Consider increasing charitable giving. You may be considering buying a house or have already bought one.
- Getting Married – Creating a vision with your spouse, combining finances, etc.
- Having Children – What are their needs? Address vision and practicalities with your spouse.
- Receiving an Inheritance – Decide up front generally what you want to do with the money. It can be easy to just start spending it if you don’t have a plan for it.
- Job Loss – How do you have to adjust in the short term? How will you adjust in the long term?
- Buying a house – If you are buying a house, consider how much you can really afford (NOT what the loan officer will give you a mortgage for!)
- Retirement – I have no experience personally. However, I think a big part of enjoying retirement is doing something significant. This takes consideration and financial planning
What Season are you in?
A Starting Point for Your Finances
Ask yourself (or talk over with your spouse, if you’re married): What is your big picture vision for your finances?
Next, with your season in mind, create a budget, with your goals and dreams in mind.
If it is too overwhelming to consider all the possibilities, start with one dream (an idea) and one goal (specific dollar amount by a specific date).
The goal helps you navigate your budget while your dream inspires you to take action.
Budgeting Gives Perspective
You will overspend every now and then. You may forget a bill. Or rush to buy a gift you forgot about.
I find it easy to be hard on myself if I overspend in one category. While this isn’t a practice we should get used to (especially when paying off debt), it’s important to have grace with yourself.
There is always next week to improve!
Personal Finance Challenge:
- Determine what season you are in
- Decide on one aspect of your big picture (talk with your spouse if you’re married) that you can work toward.
- Create a budget!
