Let's continue with personal budget planning by completing some exercises to help you in setting financial goals. This part can make managing personal finances fun because you get to imagine all the things that equate money and happiness and your life a success.The best way to approach this is to let your imagination soar. Forget about those nagging doubts, the judgments and the put-downs. Those are things like, "No way I could ever buy my own tropical island", "I don't have the skills to start my own business," or "Everything I've tried has failed so why try creating a household budget again?"
That is the self-talk that dashes all our dreams and hopes. We feel that we've failed before we even begin. Put them out of your mind and just have fun with these exercises.
Personal Budget Planning Exercise 1
Write down all the things you wanted as a child, as a teen and 5 years ago. Notice how they have changed and how much has remained the same. Perhaps you wanted to be a police officer when you were a toddler. Today, you want to thrive as a detective. Or maybe instead of being in law enforcement, you've decided you'd rather have a military career or be a bakery shop owner.
Start back as young as you can and try to recall all the careers and life goals you wanted at each stage. Make a fresh list of what you would like to achieve in your life now. Have you decided that you'd be happier owning a travel resort rather than running a computer repair shop?
Compare your lists and see which goals you achieved, which ones you let fall by the wayside, and which ones you truly desired but gave up on. This exercise will show you what you truly want out of life. Any goals that have been repeated through all your lists are those in which you are most likely to succeed – and have fun doing.
Personal Budget Planning Exercise 2
Choose the goals that you want for your future and jot down what it will take to make them a reality. Decide on a specific date when you expect to achieve them. List all the things you need to do to get there, whether it requires further education, specific experience or equipment, and a quantity of money.
Write down the things that could get in the way. This might be certain responsibilities that interfere with your schedule. Find ways to overcome them and write them down. You want to eliminate all the negatives and the barriers right now so you have no excuses.
If you have kids, get your husband to play a bigger role in caring for them. If you are a board member for your local charity, consider cutting back or dropping it altogether until you reach your personal goals. You can always get back into volunteering later if you so choose.
Personal Budget Planning Exercise 3
Make a list of ways you can cut back on expenses and save for your goal. Most likely some cost-cutting ideas will become obvious very quickly when you look at your income and where you are spending your money.
Give Yourself the Edge
Having this information will be the basis for the rest of this website. You will discover many ways to reduce your spending, but what's really important is knowing how much you need to cut back and why. Without these details, it's too easy to "break the budget" whenever the urge strikes.
Let's face it, at some point your goal will fade from your consciousness because it's highly unlikely you'll be thinking about it every waking moment. That's why you need to give yourself the edge and write down valid reasons to cut back; otherwise, you will have little excuse not to buy that item that you really don't need right now.
In the end, personal budget planning comes down to keeping things in perspective. You can buy it now and worry about your goal later, or you can save that money towards your goal now and buy the item later, depending on which one is more important to you at the time. And that's why your target has to be something you truly desire – in fact, you have a burning desire to achieve it.
And that is why having spending guidelines is so important. So it is now time to move on from personal budget planning to the basics of creating a household budget. You will then learn how to make a budget.