Wealthy Behavior and the Myth of Not Counting Your Money

I love talking about what I read. So much so that I started a blog about it, I suppose. Anyway, a very good friend of mine asked me about the most recent book I had read about being wealthy and how to do it. This was kind of a sensitive subject since he’s always lived paycheck to paycheck. As I told him, the very first step to wealth is:

Follow a budget.

calculatorThat’s it. The response I’ve gotten from a number of different people has been, “Bleh. I don’t want to do that.” I even got one “No way. That’s not being rich. I want to be so rich that I don’t have to pay attention to how much money I spend.”

I keep trying to think of a nice, happy, fluffy-flowers and rainbow-unicorns way to say this, but the best I can come up with is that this is just not reality. Wealthy people follow a budget. According to authors Thomas J. Stanley and William D. Danko who analysed research about wealthy people in their book “The Millionaire Next Door“, wealthy people spend roughly twice as much time planning for investment decisions than non-wealthy people.

Having enough money to someday not pay attention to how much you spend is a myth.

Here’s the truth. Before I had a budget I thought following one would be limiting and bothersome. In fact, it was the exact opposite. Without a budget, whenever an unexpected expense came up I always thought, “Crap, will I be able to cover that expense or not?” Whenever I wanted to buy a fancy new thing (phone, TV, car, etc, aka useless junk), I didn’t know if I could just buy it or not, because I didn’t know how much money I had nor how much I would need in the future to cover irregular (non-monthly) expenses.

Now that I do have a budget, I know I can handle unexpected expenses because I have a fund for that. I know exactly how much money I have and whether I can afford a fancy new cell phone or not. In fact, following a budget is more freeing than limiting because I worry less than I did before. I can’t stress this enough – not worrying about money is awesome. It’s one of the main benefits of being wealthy and you don’t even have to be super-wealthy to enjoy it.

So the good news is it’s really a whole lot easier than you think! The two go-to programs are YNAB (You Need a Budget) and Mint.com. They’re both similar, but Mint.com is ad driven and YNAB costs about $5/month. Additionally, YNAB has great support and learning videos. For when you’re just starting out I suggest YNAB because it has everything you need as far as explanations and other resources to get started.

It’s easy to use these programs because they’re about as automated as can be. They automatically import expenses from your bank. All you need to do is adjust the budget categories, sometimes adjust certain expenses to be attributed to the correct category, and reconcile your categories at the end of every month.road-to-rainbow

Did I mention how fantastic it is to not worry about what will happen if your car or washing machine suddenly breaks down? If you don’t already have a budget, it’s not much work and it’s definitely worth it. The benefit of having less stress alone is well worth the time spent.

If you still think it’s too much, remember: The path to greatness is paved with hardship and uncertainty, but there is a path and you can choose to follow it.

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