“I have learned to seek my happiness by limiting my desires, rather than in attempting to satisfy them.” ~John Stuart Mill
Poor spending habits is plaguing our society these days! People often think they can go in debt now and pay it off later- which can often be associated to taking pain pills to cure cancer. This mentality is a sickness and should be addressed immediately.
When I was younger, I took part in a “scouting program.” While participating at one of the camps, my “troop” competed in a relay game called “fill the bucket.” There was a large barrel of water where both teams were to start. Each team was given a plastic one-gallon pitcher for transporting water. Ten feet away there were two five-gallon buckets, each dangling from separate ropes tied to a tree branch. The rules were simple. The first troop to fill up their bucket won.
The whistle blew and we began. After the first few pitchers of water were dumped into the five-gallon bucket, we realized the bucket had several holes poked in it. Our initial thought as a troop was to work harder and move faster. A few more pitchers of water were poured into the bucket and we saw there was very little hope for us. The water poured out the holes faster than we could pour water in. Then someone had the brilliant idea to plug the holes with our fingers and just let one person transport the water. We followed his direction and won the relay. It turned out, the game was a team building exercise and we did exactly what the game was meant to promote.
In My Book, there is a work diagram that depicts how money is hypothetically diverted into life’s bucket. The inability to control bad spending habits is like poking holes in your bucket. Initially, one may think to work harder in order to compensate, but eventually realize, just like my Scout Troop did, the holes must be plugged in order to fill the bucket.
Metaphorically, I say plug the holes, but in fact I mean create a budget and control your spending.
Spending money is like a drug. It can impair a person’s financial concern when misused, or it can heal a person’s financial concern when used correctly.
One day while driving home from work, I was exiting the freeway in my car while eating a bag of potato chips. At the end of the exit ramp, I could see a homely looking man holding a sign, asking for donations. He was wearing dirty worn clothes with facial hair masking half his face. My immediate thoughts were to give him the rest of my chips, but when I pulled up close enough to read the sign all it said was “Thank you!” I felt bad that I was only willing to give him my half eaten bag of chips. When I was stopped and waiting for the light to turn green, I rummaged through every compartment in my car and was able to find a few dollars in change. I rolled down the window and gestured to the man that I had some money to give him. He quickly came and as I dropped the money into his palm, he said, “Thank you, thank you so much.” The light turned green and as I was pulling away I noticed the man putting some of the change I had just given him in one pocket and some in the other. I continued home and didn’t give it more thought until two weeks later when I ran into him at the bank with a briefcase in his hand. He was clean; freshly shaven, and wearing a fairly new looking suit and tie.
I had to ask, “didn’t I see you asking for money a couple weeks ago?”
Surprised that I even recognized him, he responded, “Yes, that was me.” Then he asked, “You surprised to see me in a suit?”
I couldn’t lie, “a bit curious,” I replied.
He then explained,
“I’ve been on the streets for a long time now, and for a long time I never expected it to change, but about three weeks ago, I was working a corner and a man in a suit came up to me, handed me $5 bill, a $20 bill, and a card. Then he said, ‘put the $5 in one pocket and use it to buy food and the $20 in the other. Don’t spend it! Save a portion of all the money you receive until you have enough money to buy a suit. Then, come in for an interview. If you can do this, I have a job for you.’ Well, I did exactly what the man in the suit told me to do and today I bought a suit. I got it for less than what I saved for too! So, I just got a brief case to go with it. I’m here today to get a job.”
At that moment another man in a suit walked up to the not-so-homely looking man to escort him to meet with someone. In amazement, I wished him luck as he left.
Weeks went by before I was fortunate enough to kill my curiosity and find out what happened to the man I scrounged up a few dollars for only months ago. He was the new bank janitor, and by the looks of it was very happy with his new job. It was even difficult to imagine that a short time ago he was on the corner of an interstate off ramp, holding a sign that said “Thank you!’ I was moved by how powerful the motivation of a simple budget to save for a new suit could change someone’s life so drastically.
Budgets are like rules to a board game. By following the rules, the game is organized and fun to play. Creating a budget makes the handling of money organized and fun to play. Encouraging progression and strategic maneuvers in order to win the game. Here are some helpful guidelines on how to create a basic budget.
- Collect all financial statements. This may include bank statements, investment accounts, recent utility bills and any information regarding income or expenses. The purpose is to create a monthly average. The more information you can gather, the better.
- Separate statements into two piles. The two different piles are Income and
- Create a list of all your sources of income. Be sure to add any other income not included in statements. Average the total income as a monthly amount.
- Create a list of all monthly expenses. Be sure to add any additional expenses not included in the Average the total expenses as a monthly amount.
- Subtract your total monthly expenses from your total monthly income. If it is a positive number, you are off to a good start.
- Separate expenses into two categories, “items you need” and “items you want.” Items you need are essential survival items like basic food, water, place to live, mode of transportation etc. Items you want are lavish foods, apparel, accessories, and all other things you can live without. This doesn’t mean you are going to live without them. Instead, you will know how much to spend on them, and where your money is going.
- Modify your expenses. The ultimate goal is to have your income and expense columns to be equal. Consider any savings as an expense. This means all of your income is accounted for and budgeted for a specific expense.
- Review your budget monthly and modify accordingly. The Eternal Wheel of Progression can help you. Ask yourself the following questions. Where am I now? Where do I want to be? What is the next step in getting there?
To your Success!