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The Importance Of Budgeting, It’s Not Just About More Money

Importance of budgeting

Your Money Journey: Lisa Sakai

When it comes to money, many people believe that having more of it will solve all of their problems.

People believe, they will be happier, have better relationships, less stress, and  more freedom. However, the reality is that simply earning or having more money is not enough. First, money doesn’t solve all of life great problems. But more importantly, even a higher income can lead to financial troubles without the right strategies.

How do you use your money effectively? Why is knowing where you are spending your money crucial for long-term financial success? Let’s take a look.

The Pitfalls of Ignoring Budgeting:

People hate the idea of having a budget. It seems so restrictive. I understand. However, we push to the far extreme and just ignore what we are spending all together. We teach ourselves to believe that making more money will automatically solve all our problems. This behavior highlights the Importance of budgeting, to protect ourselves.

“While increasing your income is certainly a positive step, it is equally important to know how to use that money wisely.”

By making more money, we don’t need to worry about what we spend. We will have plenty of money to spend and save. While increasing your income is certainly a positive step, it is equally important to know how to use that money wisely.

We all dream of winning the lottery. All that cool hard cash flowing into our bank account without a worry in the world. All we had to do is buy a ticket and boom, richer than we ever could imagine. The true reality though is scary. Statistics show that many lottery winners face financial difficulties within a few years of winning. Despite having substantial amounts of money, they often find themselves filing for bankruptcy.

The reason behind this outcome is simple: they lack the necessary knowledge and skills to effectively manage their newfound wealth. In other words, they knew how to get the money, but they didn’t know how to keep it.

More Money, Less Problems:

Similarly, individuals who receive a raise or increase in their income might think that their financial troubles will disappear. Again, more money means less problems, right? However, we start to look at that new car or maybe buying an extra outfit because I deserve it.

I work hard for my money. Poof, the bonus you got is gone and you don’t even realize how you spent it. I see this a lot for inheritance as well. It’s amazing how fast a few hundred thousand dollars can go when we are upgrading our life a bit. 

Drift Away:

Having more money does not automatically guarantee financial security or stability. Without a concrete plan and awareness of what you are spending your money on, it becomes challenging to make progress towards your goals.

Let’s say you get another job that pays more or a side hustle that brings in a few extra thousand a month. We all think that that is extra money that we can put towards savings. We assume we will spend about the same, maybe treat ourselves a bit, but will be able to put it all away in investments and savings. That isn’t what usually happens. This is why we focus on the importance of budgeting.

“By taking control of your money and knowing how to allocate it wisely, you can avoid falling into the trap.”

We start to do the creep…the drift…we start to spend more of what we are making and soon we are buying more and have about the same amount to save as before. Don’t let your mind play a trick on you. Up those automatic savings plans immediately so you don’t have that additional money to spend. A month or two into spending a bit more and having a hard time paying off that credit card and you will start to go back to normal spending and be able to save more. 

Drift can happen to the best of us and if you don’t put your plan in place fast, our minds like to drift away in la la land and you will be spending it up.

A Positive Step:

Although making more money is undoubtedly a positive step, it is crucial to recognize that financial success relies on more than just a higher income. The Importance of budgeting cannot be overlooked. Effective financial management, including strategic money awareness and planning, plays a significant role in achieving your financial goals. By taking control of your money and knowing how to allocate it wisely, you can avoid falling into the trap. Hopefully I’ve been able to highlight the importance of learning how to make your money work for you, rather than becoming a slave to it.

Having a why and a plan can be highly beneficial to avoid the drift and the concept that more money will solve all on its own. Professionals, such as the team at One Vision Retirement, can provide valuable guidance in making financial decisions, understanding risk factors, and creating a roadmap for financial success.

Remember, creating wealth isn’t just about making more money. It’s about mastering the art of financial management and ensuring that your money works for you in the long run.

Additional resources can be found in Lisa’s bio below.

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About the Author:

Lisa Sakai is a Financial Consultant who works with clients on Bucket List Acceleration and getting to live the life they want now. As the co-founder of One Vision Retirement, she has been working with clients across the country for over 12 years. Lisa’s advice provides easy to understand, logical steps and exercises that people can take action on right away. Learn more about Lisa Sakai here at One Vision Retirement.

Need help getting started? No sweat, set up a no-obligation, Get to Know you Call today: https://calendly.com/onevisionretire/gettingtoknowyouOne Vison Retirement. Your Path to Financial Independence with 20/20 Vision. Not sure where to start, take a look at a resource this resource: Baby Step Your Way to Financial Independence. Start with one of the 15 ideas listed and start to build on top of that. This will build you the home you want rather than looking at the ashes that remain.