January has a few themes for the month. It is Financial Wellness Month, Balanced Life Month, and Hobby Month. These themes work together really work well together.
Financial wellness month is about reviewing your financial situation to ensure you are on the right track. LPL has a guide from a few years ago detailing 10 steps to check your financial wellness. Included in those steps are tracking your spending and reducing unnecessary spending, a.k.a budgeting. Dave Ramsey says, "A budget is telling your money where to go instead of wondering where it went." Put another way, budgeting is being intentional with your dollars at the beginning of the month and making a plan.
"Frugality, quite simply, is about choosing the things you love enough to spend extravagantly on - and then cutting costs mercilessly on the things you don't love."
- Ramit Sethi
This quote ties into Balanced Life Month and Hobby Month quite well. By focusing on the things you love to spend on (for most of us, those are our hobbies), and by cutting others, you can improve your financial wellness. You can have a line item in your budget "(Insert thing you love here)". Mine says, "Rob Golf" and it allows me to set an amount each month for my favorite hobby.
My high school physics teacher hated the word equation. He said an equation was something you memorize until the test arrives, then forget immediately. He preferred the phrase "guide to thinking". He walked us step-by-step through the equation, and where the pieces came from so, come test time, we could think through WHY those variables were necessary to solve the problem. I view budgeting through the same framework. Most people cannot stand the word budget. If you budget because you "have to", you will write something down and never look at it again. Or you will look at the end of the month to see where your money went. Instead, if your budget is " a guide to spending", you can use it to help you plan your hobbies, achieve balance, and improve financial wellness.
Christy Wright, who used to work with Dave Ramsey, said, “If you do not decide what your priorities are in life, everyone else will decide for you.” We are big believers in being intentional with your money. From budgeting to retirement planning, intentionality is the key to success. We encourage you to set up a budget, work on your financial wellness, and start being more intentional with your money.
Thank you for reading,