There’s a great scene in the movie “The Patriot” with Mel Gibson. Mel Gibson’s character is giving his young sons some final shooting pointers before they engage the British in a battle to save his oldest son. After he is finished with his instructions, he says, “What did I tell you fellas about shooting?”. They both respond sheepishly almost in unison, “Aim small, miss small.”
In other words, the more focused your aim on a target, the more likely you are to be successful. If I am simply aiming for the target on the wall, I may miss the target completely. However if I aim for the center of the target, while I may not hit the center exactly, I’m more likely to at least hit the target somewhere.
To improve your “budgeting” aim, you’ll need to make one major shift in the way you think about, and approach your spending.
Stop making spending decisions by checking the bank balance, and use the budget to guide your spending instead.
I see this frequently in working with people one on one. They spend a lot of time focusing on accounts. Why? Well, that’s the structure that society has in place for money management. Think about it. Isn’t that where you handle things, in a way? You get money, you put it in the bank. To spend money, you remove it from the bank. It’s easy to see why we get so focused there.
But imagine that you have $1000 in your bank account. You want to buy some new clothes. You check the bank balance. There’s money – so you can spend. It seems logical enough.
But your aim is so unfocused, you may be spending money you need for the light bill, or gas for the car, or groceries. You may not hit the money you’ve set aside for clothing. So how can you tell? Well you can’t – if all you are aiming for is to stay above zero in your bank balance.
Want to improve your aim?
Check your budget
How much money have you budgeted for clothing? Aim for that target when spending. If there’s not enough, at least now you know and if you want to, you can make an adjustment.
Are bank accounts important? Of course they are! They are the physical storage containers for our money. They represent where your money is. But the budget keeps track of your plan and what your money is doing. Your bank account has no idea what the plan is. It’s like asking someone for directions who’s never been where you are going.
Stay focused on the plan. Make sure your money is doing what you told it to.