Many people find sitting down and writing out a full budget an impractical task, much less following said budget down to every penny. Achieving real wealth without a budget is a bit like running a marathon with no training—it’s possible but much more difficult than it needs to be. Finding the right budgeting style and sticking with it is integral in gaining financial freedom, but it can be daunting to figure out where to start.
The first step is discovering your money personality; knowing how, when, and where you spend your money will tell you a lot about how you can maintain your lifestyle while working towards the real wealth you deserve.
Savers
While saving is an important part of achieving financial freedom, and can open many doors in your journey to real wealth, taking it to an extreme may also negate your hard work for several reasons. By penny-pinching, you deprive yourself of any leeway and may set yourself up to splurge too much later on. Just like crash dieting, if you don’t allow yourself any freedom to spend on recreational items, you may end up binging later on. Additionally, getting what you pay for is a principle to keep in mind when trying save money. If you buy a cheaper product with cost in mind, you may end up spending more in repair or replacement costs.
Spenders
Spending is an unavoidable fact of life and no matter what there will always be expenses that need to be covered. However, spending can easily get out of hand if you are not used to compromising on certain costs. We are not here to say that you should cut out all unnecessary spending and save everything else, in fact you need to have some kind of recreational funds to prevent splurging later on. However, achieving financial freedom does warrant some time spent on prioritizing and cutting back on what isn’t of highest importance.
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