Steps to Financial Literacy - Step 8 of 10!

I apologize for the slight delay releasing Step 8, but the irony behind why it was a late comes as a benefit to my readers. You must be sitting there gripping the end of your seat with anticipation. First, I had a leak break through the bottom of our bathtub and was unable to get it stopped until it ruined a portion of the ceiling in our kitchen. That is what you call the joy of home ownership and a section that should be prominent within everyone’s budget. You know - the line item of House and Vehicle repairs that never seems to be wanting attention. The second and third reason for the delay was that my Birthday was March 6th. I tried calling Shaq since we have the same birthday, but he must’ve given me the wrong number. Lastly, the stock market has been in free-fall the last couple weeks and I needed to review my buy list. For disclosure, I added to several positions that will begin to drip more dividends into my account over the coming years.

Speaking of the stock market, this is a perfect time to re-analyse if you have the proper risk/reward profile for your investments. Some people have never experienced the sharp swings that occurred over the past few weeks. However, they are common and it’s something to review. It can go much lower from here, but I will keep putting idle cash to work over the coming months.

Let’s focus on Step 8. You should now know the intimate details of your financial situation. You know how much debt you have, how much money you take home each month, and where you typically spend your money. We have located expenses that are “wants” and can be trimmed that were either a little high or out of control. Most likely, the budget that you made will have revisions as you keep adding information. That is OK and expected. Review your budget and spending regularly to make sure you continue to be mindful of the money flow. As previously stated, it usually takes a few months to have a refined and accurate budget.

I really want to hammer this home - The most important part of the budgeting process is the follow through and the review of your spending. Treat your budget like a cooking recipe. If you do not follow the recipe, you will end up with something you probably won’t like. So each month review your budget, see which non-monthly payments are due this month and plan accordingly. At the end of the month, check your spending categories within the budget to see where you still need to improve. Carefully consider if your expectations were unreasonable or if the culprit was impulse spending. Excess money left over should be directed to a savings account so you do not actively see it or be tempted to waste it.

Thanks again for stopping by. Check back soon for the reveal of Step 9!

- Budgeting - Consulting - Financial Planning - Passive Income  - 
Guiding Every Generation to Eliminate Debt, Create Wealth and Find Independence.
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