How to budget based on your personality and not popularity

Let’s face it. When you hear the word “budgeting”, it makes you want to roll your eyes ten times over, while not minding if it ever got stuck. It’s time consuming, inconsistent and it forces you to realize you suck with managing your money.

"Wait, what? Are you judging the way I spend my money?"

No. I am in no way shaming those who do not budget or have not found the need to. That is not what I came here to do. I believe that as annoying as it is when finance experts tell you to budget, budgeting sets you up for long-term financial success. It’s the tool every broke person must first use to become wealthy.

Budgeting Leads to Financial Success

Budgeting is the foundation to financial success. Whatever you think budgeting is, it is not a means to make life boring and make life changing sacrifices that make you miss out on life’s events. Budgeting can be the opposite of what I initially thought it would be. It can be fun, easy to do and financially rewarding in the end.

Budgeting is a means to get you to save and to be more mindful of your spending - something we all should be doing. Life can already be so hard with unexpected events and unexpected life circumstances. Being prepared can save you the dreaded financial stress that comes with having to dig yourself deeper into a financial crisis. Although some people do make extreme sacrifices when they have desire to save, it’s usually for a goal that they aggressively want to be working towards.

For example, I had made it my goal to pay of my car this year. I bought a $13,000 car in June of 2017, and paid it off 2 years earlier than was expected. This is simply due to the fact, that I was dedicated to paying off my debts, and so I would do anything to get rid of it, as fast as possible. I worked a second job as a server, bought less personal items over time and didn’t travel. You could have still budgeted and saved like me, but if you were not about making similar sacrifices, you would just have finished paying off your car exactly when your loan was supposed to end. Budgeting and saving works on nobody else’s timeline but yours.

There’s a Budget Method for Everyone

Budgeting also does not look the same for everybody. It is almost like driving a car. Most people need a car to get around and do their everyday activities. Some may do it in a pick-up truck, while others may do it in a sedan. It’s all about finding your unique style and preference.  An interesting opinion I have as to why some people love to budget and why other’s don’t, comes from a *book by James Clear called “Atomic Habits”. This book is about research proven ways to break bad habits, form good ones and achieve successful long-term change.

Clear believes that you should build habits based on your personality. Healthy habits are best built when you make them obvious, attractive, easy and satisfying. This order is the brains primary wiring sequence when it comes to creating a habit. It starts with a cue (seeing a donut), then a trigger (it’s your favorite kind), a craving (right in the center of the kitchen table), then your ultimate response (get high on dopamine). Also, to be clear — I am not saying that donuts are healthy (and if eaten too often for the wrong reasons, can make you very ill). This example, is just a great way to visualize the four step process and can also be explained in the reverse. To break a bad habit, you would instead make it hidden, unattractive, difficult and unsatisfying. You don’t have to build the habits everyone tells you to build. Choose the habit that best suits you, not the one that is most popular.

The answer is pretty simple. Most people don’t like budgeting because they are only taught one way to do it. In forming any good habit, you have to make it obvious, attractive, easy and satisfying. What that looks like to you, you have to find out for yourself. Some people like going to the gym, I like dancing in the mirror.

Budgeting Done For You

Budgeting does not have to look like your everyday stuffing envelopes, dropping bills and coins into different sized jars or punching in numbers into an excel sheet. Budgeting can look as simple as using an app — that links all your banking cards — so that when you go to make any purchase it categorizes them into it’s respective sections and creates an easy to analyze visual chart. This day-to-day budgeting approach, allows you to cancel out the time consuming, inconsistent calculations that most people run away from when it comes to traditional budgeting.

For the longest time, I never liked the idea of having to track my expenses and thought I was perfectly good at managing my money on my own. I hated the thought of having to write out in a notebook, what I spent money on for the day and knew I would not be consistent. My savings just looked like putting money away whenever I could, and hoping for the best. Then I stumbled upon a bank card that would change my life and my stubborn thoughts on the ability to budget.

I was searching for a cashback rewards card, that wouldn’t have me owing interest to someone else — not to mention paying those ridiculous bank fees. The only rewards card I had at the time (and still have) was my American Express. I desperately wanted to get away from using it a s primary means to get rewarded for travel, when I realized it was only getting me deeper into debt. That’s when I stumbled upon KOHO.

KOHO is a cashback Prepaid Visa card, that you can use to pay off your bills and other expenses while also using it to earn 0.5% cashback on all spending. Additional features include savings accounts for multiple life goals, dollar round-ups and wait for it — automatic budgeting. Download the KOHO app (https://web.koho.ca/referral/7083SQ6D) and get an extra 1% cashback for the next 30 days.

I honestly never realized how easy it was to budget, not knowing there were apps that could already do it for me. Other apps like Intuit’s Mint are great budget trackers, if you could do without the extra bank card that comes with KOHO. Budgeting now became obvious (notifications), attractive (easily set goals), easy (automatic tracking) and satisfying (savings increased). Every time I made a purchase it would notify me, I could easily sign in and see how much I’ve spent in what area of my life for the month so far, and I could create a savings goal where money could automatically be put into that respective fund.

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Budgeting is a key tool in helping you to track your income while also managing your expenses. It allows for one to know what their expenses are, how much money to spend and how much you are willing to save away. It’s especially useful for people who would want to set aside automatic payment towards their savings every month, without having to remember to do it manually — which sounds so much like me.

In order to start building wealth or even think about passive incomes like investing, you have to start saving — which is done through a strategy or tool called, budgeting. Whether you hate the idea of it or now seem somewhat interested in finding something that works, saving is a generator for wealth and budgeting is to. Budgeting is here to stay and deserves to, because finding my way of doing it has finally changed my life.

*Author: Clear, James, Published: New York : Avery, an imprint of Penguin Random House, [2018].

** KOHO is a free pre-paid visa chequing account that makes it easy to feel good about saving and spending.

***Check out this incredible podcast with James Clear on the Rich Roll Show.