Budgeting Isn’t a Bad Word
Do you ever think you need to get better at budgeting? Learning how to budget well takes time and practice, but being in control of your finances brings benefits that extend past your wallet.
Harrison Hinz, a Certified Financial Planner (CFP®) with First Pacific Financial and a Spark Financial Advisor, says nurses can take some steps to begin the budgeting process, and one of the first is shifting the way you see and prioritize budgeting.
“The term ‘budget’ is often looked at with a negative connotation, mostly because you are limiting yourself to spend less money,” he says. Nurses who plan effective budgets are taking control of their financial lives in a way that can help fix past mistakes, make a current plan less stressful, and even give a path toward a future where money will help you get what you want and need. In fact, he says, budgeting isn’t always about how you save money–it’s how you spend it, too.
“The skill to control how much you spend is one of the greatest skills to have,” says Hinz, “because you use it now when saving for the future, but you will also use it when you retire and are spending down your savings.”
Where can you begin? Hinz says to first take a look at your income and your spending history. At the very least, begin with looking at the last three months, but looking back over a longer time will give you a better picture of where your money is going.
This stage is, of course, one of the biggest barriers to planning a good budget. It takes time to go through all your bills, find the information you need, and record it. And, says Hinz, nurses who typically work long and demanding shifts, end up with little desire or energy to get down to the nitty gritty of their spending habits.
Setting aside blocks of time, even 30 minutes a week to help get you going will make a difference. Like with other habits, chipping away at budgeting tasks with a friend can also help. You don’t have to share or discuss each other’s information, but you can help nudge each other (for instance, one week find all the credit card and household bills, the next gather all the bank statements, the next begin categorizing, etc.).
To figure out your patterns, Hinz recommends sorting your spending into categories. If you have steady expenses, use broad categories:
- Bills
- Food
- Entertainment
If you want to really map your spending closely, make the categories even more specific:
- Groceries
- Dining out (including work snacks or meals, coffees)
- Clothing
- Entertainment
- Household bills (electric, gas, oil, etc)
- Insurance
- Pets
- Clothing
And there’s no right way to plan your budget–if you use the method that you like, you’ll be much more inclined to use it and stay with it. Hinz says nurses should use whichever tool makes it easier for them to approach the budgeting tasks. “Some people like the hard numbers and using spreadsheets could help sort and set limits,” he says. “Others like touch and writing it out.” And that old-fashioned method of putting money into envelopes for specific expenses? Don’t give it up if it works for you. “The envelope system can work for people who like to have a visual on the money they have to spend,” he says.
Many people delay budgeting or don’t even start because they feel overwhelmed with the task or that they should have more money than they do. “It all doesn’t have to happen at once,” he says. “Start small with understanding where your money is going and build an emergency savings account.”
Finding someone to help you can make a difference. You can hire a financial advisor or see if your employee benefits or a professional organization will offer any financial planning assistance. “Life happens and adjustments will need to happen,” he says. “Having an advisor to help you navigate the changes will allow you to focus on your goals.”
Remember that your budget reflects your own unique life and circumstances. “Don’t compare yourself to others,” says Hinz. “There will always be someone in a better situation and someone who has more challenges. Take the time to enjoy where you are at and look at what you accomplished.”
