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Money Conversations: Flex Your Financial Muscle

New Year’s comes with new resolutions, such as picking up a healthier lifestyle and sticking to an exercise routine. Well-being, however, depends on both physical and mental health. So while you are sweating in the gym or on a yoga mat in your living room, consider flexing another kind of muscle – your financial muscle. It is time to get your finances in order.

A recent research by PwC, a global network of business consulting services, has found that “as many as 30 percent of the working population are seen as “struggling” with their financial problems.” Also, Peter Dunn reports in his USA today article that people who stress about money tend to have poorer diets, trouble sleeping and impulsive shopping habits, a so-called “retail therapy.” All this can contribute to more bad financial decisions and even those extra few pounds you are trying so vigorously to burn at the gym. What’s worse, lack of proper financial management can set a poor example for children.

It’s time to take control. I am talking about budgeting. reports that one third of Americans do not keep a budget; and CNN Money claims that 3 out 5 Americans do not save. Budgeting, like exercise, requires a bit of discipline, but is well worth the effort. In the nutshell, a budget is a plan of how you are going to spend your money over a future period of time. A good budget should have several components to be successful and be periodically revisited and revised if needed.

          1. Identify your projected income.

          2. Include your monthly bills and necessary purchases.

          3. Allocate funds towards savings.

          4. Allocate funds towards paying down debt (if you have any).

          5. Allow for personal expenses and entertainment for each 

              family member.

When you keep a list of your monthly expenses, it is easier to identify which expenses on that list could be reduced. For example, you could shop around for a more affordable insurance plan or phone provider, etc. Monthly expenses, such as groceries, can also be better managed if you take a further step to plan your menu and make a shopping list.

Everyone understands the importance of savings, but not everyone actually does it. The most common excuse is lack of extra funds. Set money aside before you spend the rest, not the other way around. Here is a trick: you have to make savings part of your monthly bills. Budget it in. Decide which amount you can afford to set aside each month and treat it the same as a utility bill or a creditor note. You absolutely cannot miss it! Just like with an exercise routine, you can start small and gradually increase it over time.

Paying debt down is another important point in the budget. It is advisable that you pay more than your minimum payment due so you can get rid of that debt quicker, but don’t go overboard. Some people get too carried away and forget to allocate enough funds towards other categories. The budget has to be balanced.

Allocating money for personal expenses, hobbies and entertainment is just as vital. You have to live your life, not just pay bills. If the money you spend on these items is what is left after you have paid your bills and set some aside, you know you are not overspending. 

Once the budget is laid out, you might discover that you are wealthier than you thought. Sadly, in some cases even with a proper budget, the income might not cover enough. In that case you would have to either see how you can reduce some financial obligations or find additional sources of revenue. Financial counseling might be an effective option to guide you through this process while staying optimistic.

As you can see, budgeting is vital to financial health, and, consequently, to your mental and physical well-being. With a proper budget, you can live a fulfilled life within your means and have a peace of mind. It is important to practice this habit and pass it on to your children. School-aged children who receive pocket money should be taught the principles of budgeting so they can learn this helpful skill early on.

About The Author

Jane Vazquez

Jane Vazquez is a Certified Financial Counselor. She is a co-owner of a Mississippi-based company that provides services of financial consulting, bookkeeping, and tax return preparation, among others. You can reach her at

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