Taking a Stab at a Budget

by Gerry O'donoghue - Boot Camp Advisor

Taking a Stab at a Budget

Natasha's spending information was coming in bit and pieces but if she is not constantly reminded to send it then it does not arrive for a few days. It's nearly a week behind, but that's pretty much par for the course.

Waiting around for the last 3 or 4 weeks hasn't gotten her any closer to getting a grip on spending, so I have decided to provide her with a budget based on the very limited information I have. But budgeting, or cash flow management as I prefer to call it, will only have a reasonable chance of succeeding if the person is primarily involved in putting it all together. This usually means they have thought about how much they really need to spend on certain items and perhaps more importantly, how much they CAN'T spend on certain things if cash flow simply does not allow it.

I like to break it up into 2 major types of expenses — the first being what I NEED to spend money on just to live in the most basic sense, and the second being everything else ("luxuries" and "perceived necessities"). Then I start estimating how much I need for the bare necessities like rent, food, clothing, etc and I start allocating my available cash flow to those items. Then, if there's anything left over I start allocating and prioritizing it to the "extra" stuff (like entertainment, cable, internet access, phones, eating out, extra clothes beyond the pure basics, etc). If there's nothing left over then so be it — I just have to go without until I such time as I generate money. It's quite amazing how some things we believe are necessities may not really feel that way if we don't have the money to pay for it.

The "numbers" part of this process is easy. It's the emotional aspect that is hard and ultimately determines whether the plan will succeed or not. As with any endeavor, if you have truly "bought into" the process, you have a better chance of seeing it through when the tough times hit — and they will, they always do. I don't believe this is happening in Natasha's case, and as such, I fear for the likelihood of success. But I feel I have to at least do something — anything — at this stage to maybe jumpstart the process (yet again). Maybe the schedule I just gave Natasha will make her sad, mad, angry, shocked, confused, anything. Hopefully it stirs up something within her that will get her talking with me about it — even if she thinks I'm out of my mind or the amounts are "unfair". In turn, that might get her to a point where SHE decides how much she can or cannot spend on what. Let's see what happens this week…