As a financial coach, I sort of geek out when it comes to budgets. Most people would rather go to the dentist than do a monthly budget. But I want to share a super simple budget plan I Learned from Daily Worth Founder, Amanda Steinberg.
Even women who hate budgeting will love this.
I first heard about it while on a webinar on women and wealth. It was hosted by my coach and mentor, Barbara Huson (formerly Stanny). She’s an author and thought leader in the field of women and wealth. Her first book, Prince Charming Isn’t Coming is one of the best books on women and money I have ever read. In it, she deciphers the psychological relationship between women and money. It’s truly a fascinating read.
Barbara’s guest on this webinar was Amanda Steinberg, CEO & founder of Daily Worth. This is the budgeting method Amanda shared on the webinar. She admittedly finds following a budget challenging. From all my years of working with women, I know most feel the same way.
I get it, budgets aren’t sexy.
Yet, controlling spending is one of the first steps necessary if you’re going to create wealth. So, if you find budgets distasteful, you’re not alone. Keep reading. You’ll love this system.
It involves using two checking accounts from which to pay expenses. The first checking account is your bill paying account; the one you’ll use to pay the bills you know you’re going to have each and every month, the fixed expenses.
The second checking account is your spending account; the one you’ll use to pay for expenses that are not your monthly overhead bills. This is your discretionary fund. Your income gets deposited into the first account, the bill paying account. From that account you’ll transfer money into your discretionary fund account every two weeks.
Savings and retirement account contributions get paid from your bill paying account because you’ll categorizes savings and retirement contributions as mandatory bills.
What I love about this system is that you pay your mandatory bills – including savings and retirement contributions – before spending discretionary money. This method keeps you from spending money you think you have but really don’t.
I find when coaching women, the simpler the budgeting process the better. It gets the job done without the unnecessary overwhelm. Many women resist the idea of budgeting. They guesstimate instead how much they have to spend on discretionary items before all their mandatory bills are even paid, which gets them into trouble.
Here’s a simple way to do a budget – and save for retirement at the same time – without having to feel like you are actually on a budget.
Admittedly, as a financial coach, I think this system is too simplistic if your situation warrants creating a highly effective spending plan. However, as mentioned earlier, it will get the job done for those who find themselves stuck in resistance and therefore not budgeting at all. Following this system would be better than doing nothing.
Patti Fagan, an award-winning financial coach and retirement planner, is a sought-after speaker on Women, Money and Retirement. She has owned and operated an independent insurance and financial services agency for the last thirteen years and has helped hundreds of women achieve financial security for their retirement years. As a financial coach, blogger and writer, Patti is passionate about empowering women with their money mindset because she wants women to be financially secure, both now and in their retirement years. Visit http://montereymoneycoach.com/ to download free resources to help you win with money.