July 21, 2022

Be Budget Realistic

By: Patrick Nalepa

When I bring on a new client, we create a unique budget just for them with the sole intention of accomplishing their goals. Oftentimes these budgets have to be adjusted as life gets in the way, whether that is a car breaking down, travel, changing of jobs, etc. Some of these can be planned (scheduled travel, choosing to change employers, etc.) while others seem to ‘happen to you’ (car breaking down, leaky roof, termination of employment, etc.). 

While a large part of my job as a financial coach is to hold my clients accountable to their goals and budget, it is also very important for me to remind them that sometimes life gets in the way.. “Be realistic” applies to those events that happen to you in the middle of a month and you need to recalibrate expectations to ensure you keep your head above water. This might mean temporarily pausing your savings goal so that you don’t have to take on additional credit card debt. When this happens, clients often feel they failed and beat themselves up over it. But what does that help? Nothing! The better route is to tread water this month and get back on the horse even more determined moving forward. You need to take it one day at a time, which will quickly turn into one month at a time. 

Over the last several months, something has happened to all of us: INFLATION. During the trying times of high inflation, it is very easy to say to yourself, “Oh everything is so expensive that I can’t save anything on a monthly basis.” And that may be true for you at this time. Or maybe you have to decrease how much you are saving indefinitely until inflation tames a bit. Either way, the key is to “be realistic” with yourself, your budget, and your goals. I’m not saying to let your expenses balloon and use inflation as an excuse, but sit down with your expenses and make realistic targets that you can hit (with a bit of a stretch), then hold yourself to those goals. While paying more towards debt, saving more, or investing is always a great goal, there is no point in having goals if they are not attainable because of inflation. This just leads to frustration, burn out, and complete abandonment of your financial plan.

If I have just described you to some extent, please reach out to me for a free consultation at [email protected]. I would love to learn your situation and find the best way we can work together to combat inflation and help you reach financial freedom. Remember, the best plan is not the one that has you saving the most, but the one that you are able to commit to and follow, the realistic one.