I'm happy to welcome my friend Jessi, The Budget Mama to Six Figures Under today!
How much money is enough money? Seems like a simple enough question, but the problem is not the question itself, it is the ideology behind the question. “Enough money” implies that you do not have enough money right now, which may very well be true, but sitting around waiting on a money tree to start growing in your backyard is not going to help you manage your money any better.
I used to think, “when I start making more money, then I’ll budget. After all, you have to have money in order to budget, right?” Wrong. Totally dead wrong.
My daddy always told me growing up that “money just makes you more of what you already are.” In other words, if you are spender now, you will be a spender later when you “have money”, so you better make sure you know how to manage money before you have it. If you like to take risky risks with your money now that continually leave you scraping by, you will do the same thing when you have more money “to play with”.
More money just allows you to keep doing what you are already doing, just with more money. Therefore, your situation is not going to change nor improve when you have more money. If you want a better life for yourself now, you have to stop waiting and start doing.
The first budget I ever made is when I was completely broke and about to be evicted from my apartment. My first budget saved my life because it made me take ownership of my stupidity with money. It gave me the roadmap and direction I needed to manage my money.
Not sure where to start with budgeting? Keep it simple. Start with tallying up your expenses (taking three-month averages for bills/expenses that do not have a set payment every month) and then tally up your monthly income. From there, subtract your income from your expenses.
It is not a fancy way of budgeting, but it works. It is a simple process that allows you take ownership of your money. Budgeting is not, nor should it be complicated. A simple budget will give you the roadmap to success with money.
However, a budget alone will not make the amount of money you have right now work for you. You have to make your money work by applying and sticking to your budget. If you want your money to work in your favor, you have to provide the hustle by holding yourself accountable to your budget.
If your budget is in “the red”, meaning that you do not have enough income to cover all your expenses every month, then you will need to apply the cut and side hustle process. The first step is to cut all unnecessary spending and bills (such as cable, unused gym memberships, and maybe even the data package on your phone). This is the hard part of budgeting – letting go of things we feel we truly need and that we want to have. However, if you want to get ahead with your money, you have to make the income you earn right now be enough money for you.
The side hustle process is where you do things “on the side” of your regular job. Things that I did when I was broke to help get me out of the red were; sell items that I did not need/want online, pick up extra hours at work, work a part-time job on the weekends, tutor fellow college students, and little odd and end jobs for other people (running errands, helping with yard work, and babysitting).
The cut and side hustle process is not easy. However, if you give yourself a goal to meet (“I want to make X amount from my part-time job before I can quit” or “once I have saved up X amount I will have my cable turned back on”), it will make the cut and side hustle process feel less like a prison sentence. Giving yourself goals to meet will help you achieve making the money you have be what you need to live well on.
There will never be enough money, you will always want or need something. The key to “having it all” is to make do with what you have right now. Stop waiting for more money to fall into your lap, to win the lottery, or for Great Aunt Edna to die and leave you $10,000. Make your money work for you right now.
How About You?
- What is your “enough money” philosophy?
Jessi Fearon is a wife, mom of two little boys, and writer behind The Budget Mama, a personal finance site where she shares her family's real life on a budget. She is devoted to helping her readers thrive on a budget while becoming better money managers.
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I have noticed with my families spending the more money we have the more we consider something a “necessity” . It’s also so easy to get caught up in what others around you consider necessities. I had neighbors actually ask us what was wrong when we didn’t go away for spring break, as though spring break automatically means vacation. With that way of thinking there will never be enough money.
Great article, Jessi. Like Jim, our children are grown, educated and living on their own. Due to various circumstances that I won’t detail here because they a included a medical crisis with an extended family member and one of my own, our retirement funds were disappearing fast enough that it scared us. We have had to completely retool our retirement, but those circumstances also forced us to evaluate what was important to us as we retooled our budget. Eating out? Not so much . . . . Traveling to a grandchild’s competition? We wanted that. Decades ago, putting my husband through law school in our young married days required extreme frugality, and we found that we could return easily enough to those ways. Sites such as this one have updated our frugal skills such as switching to prepaid cellular plans. Do I occasionally have pangs when someone else casually suggests an activity that is now outside the expenditures we have allowed ourselves? Sure. Am I unhappy, envious, frustrated by what we can’t do and others can? No way. Our lives now focus on what’s important to us. Tension is gone. We feel a sense of accomplishment to go from regularly taking at least $2,500 out of our retirement savings each month to saving a few hundred each month and letting our savings regrow. This morning, we mowed and weeded the acre lot on which our paid-for home sits, and we’ll be putting together a veggie stir fry for lunch. Monday, my husband will go to his guitar lesson, a planned-for expenditure. In between, we’ll be rinsing out zip-type bags to reuse, baking bread in the sun oven, using saved shower warm-up water to fill the dog’s water bowl and taking other measures that have enabled us to change our financial future and eliminate any sit-up-in-the-middle-of-the-night-gasping episodes.
Wow Linda what an incredible story! I admire your frugality and I think that is incredible that you and your husband recognized the need for retirement before it reached a critical point. Y’all are rocking it! 🙂
When I started budgeting I had a goal in mind. To retire early.
With a goal making those cut’s, was enjoyable for me.
I did not feel deprived, just directing as much of the money towards the goal.
The amazing thing was, that nothing was missing. I as happy as before with half of the money.
How much $ is enough? Here’s a crazy (and true) notion. We have been at both ends of the spectrum – lived below the poverty level, never taking a dime of welfare and lived well above the “median household income”. We finally decided (once our kids were well squared away) to just spend what we really needed to be secure and happy and guess what happened? We stopped spending – tons of $ every month. And it hasn’t been painful. Initially, there were some growing pains, but now – ha – it’s a piece of cake. And our savings keeps growing and growing and growing. Sure wish someone had told me that happens once your kids are grown, educated and living successfully on their own. We’ve always given to those in need/charities, but now we can actually do it a LOT more – and it’s all because our “responsibilities” got fewer and fewer as we got older which opened up the possibility of giving to those who are really in need. You guys are all on the right track. Trust yourselves and your guts. You’re going to get to a place where all those things you ever dreamed of doing actually do become real possibilities. Kudos all the way around!
Thank you Jim and what an awesome story you have to tell! 🙂
I think this concept of never having “enough money” applies to giving as well. Many people put off giving to others because they don’t feel that they will have enough for themselves. However, when we give out of our limited resources, I’ve found that we understand the meaning of generosity even more.
So true Sarah and I can honestly say that I am the worse giver ever! It is my constant struggle to remember to give from the little I have, because our earthly treasures fail in comparison to our heavenly one! 🙂
Great post for beginning budgets! I also think its important to remember that “budgeting” or “being on a budget” doesn’t mean you are poor or don’t have money! It simply means you know where your money is going! I am so glad that as I’ve gotten older (and the hubs has gotten more raises) that we haven’t adjusted our lifestyle to our new income. Lifestyle inflation is what keeps so many of our friends in the poor house even though they make 6 figures!
Oh yes Elise that perfect advice! Everyone wants to look at the “b” word as a jail sentence instead of as a roadmap for where you want your money to take you.
The concept of “enough” has been a recent topic of conversation at my house as we’ve discussed what our financial goals could be. I totally agree with the idea that money makes you more of what you already are. That’s why it’s important that we start trying to be who we want to be before we make our millions!
Heck yes! 🙂 That is awesome that y’all have included “enough” in your money goals discussion. More of us should definitely be doing that! 🙂