Offense or Defense? How do you budget? Are you even watching your money? No matter what goals are trying to be achieved, it’s not likely to happen if no one is watching the money. An awareness of what’s going on with your finances is essential. What’s coming, what’s getting paid, and what’s going on with any remaining money. If money isn’t told where to go, it can’t be maximized towards your goals. It will slip through your fingers.
Having a great offense:
Playing offense would be knowing the money coming in for the month and designating each dollar where to go. Send it to pay for a bill, an expense, maybe pay down a debt, or put into savings or investments according to a plan. Yes, a plan is important too. Without a plan, spending is just random and not targeted towards a specific goal. Just like in football, there’s always a plan for both offense and defense. Time is put in to study how to play the game and maximize chances of success and winning. Finances are no different. Plan and have a great offense. Then execute as close as possible to that plan.
Goals (SMART goals) are key. SMART goals can be it’s own blog post. But the essence is Specific, Measurable Achievable, Relevant, and Time based. If goals are created using the SMART structure, they tend to be met more frequently. There’s a saying “If you aim at nothing, you’ll hit nothing every time”. So set SMART goals, plan to achieve them, and track them. That’s a great offense. Have short, medium, and long term goals. Just as mountains can’t be climbed in one giant step, goals can’t be met in one giant step either. Daily decisions move towards weekly, weekly move towards monthly, monthly towards yearly and on an on. Some will be met, some will be missed, and some will be excepted. But in general, you’ll be closer to where you wanted to be than if you just wandered through life.
Take an active role in keeping expenses down to a minimum. Often it’s difficult to make more money at a typical job quickly. Generally workers have to wait for an annual raise or an even less frequent promotion. That should be part of the plan too. But cutting expenses can yield immediate results. Decisions to buy one item over another could be the difference between spending a little money or a lot of money. Each of these decisions move you closer or farther away from your financial goals. Lots of small good decisions lead to big wins. Lots of small bad decisions lead to big losses and mistakes. To make a Smoking good decision, you have to be prudent, intentional, and consistent. Prudent, intentional and consistent purchasing is a great offense for personal finance.
A defensive budgeting perspective is much different. Some find themselves trying to make their dollars last to the end of the month. They may not be tracking all their expenses throughout the month. They may be struggling to come up with rent money. Maybe it’s emptying the change jar to keep the lights on. Whatever the situation, budgeting (or simply paying your bills on time) seems to be a struggle.
These struggles are real. These struggles stem from a lack of planning and poor execution. Not paying attention to the details and being on offense for your personal finance will surely lead to you playing from a defensive position. Defensive budgets are plagued with creeping expenses that go unnoticed until it’s time to pay the light bills. It’s trying to just get through just one more day, week, or month. It’s living paycheck-to-paycheck. That’s a defensive position.
There’s balance to this game. Sometimes there will be unexpected expenses that force you to go on the defensive posture. But if it is happening every month, you’re losing the game. Stop playing defense and make choices that get you back on the offensive drive.
Personal finances are not a game to be taken lightly. Families depend on security. It’s the most basic need. By playing offense with your budgets and directing your money, you’ll win a lot more frequently financially. Paying attention to your incoming bills and expenses and outgoing money will show you the play book for the month. Make choices that support moving into a better position today and in the future.