When I say “budget,” what pops into your head? Chances are, thinking about your budget – or your lack of one – brings about feelings of dread, deprivation, and guilt. Why is this?
Many business owners – and non-business owners, for that matter – think of a budget in much the same way those of us who are overweight think of a diet. It’s going to be hard. You might have to give up some things you want. Maybe you even feel fear about being able to stick to it. Or maybe your fear is you’ll stick to it for a while, and then relapse.
Many years ago, my doctor told me why diets don’t work. By their very nature, diets are meant to be temporary. We change our behaviors for a short period of time, but then we fall back into old habits. The key to successful and permanent weight loss, he said, was to view a healthy diet as a lifestyle.
And that’s exactly how we should view our budget.
Starting with the end in mind is a bad idea
If you’ve ever dieted, chances are you started with the end in mind. This can work if you only have a small amount of weight to lose. If, however, you want to lose a lot of weight, starting with that end number in mind can sabotage you before you even start.
A better way of tackling your weight loss is to celebrate small victories. What do I mean by this? Let’s say you weigh 250 pounds, and your ideal weight is 150 pounds. A desired weight loss of 100 pounds is no small feat, and if you start by saying, “I need to lose 100 pounds,” you are likely to become discouraged very quickly.
If, however, you say, “I want to lose 10% of my body weight,” that is only 25 pounds. It’s still a substantial weight loss goal, but it’s more attainable than 100 pounds. Once you reach that 25 pound weight loss, you can set your next goal. Because you are setting your goals closer together, you are less likely to lose motivation.
“But,” you may be thinking, “at a healthy rate of two pounds lost per week, it would take me over three months to lose 25 pounds. That’s still a long time!” And…you’re exactly right. So, what’s the solution?
Throw out the goals altogether, and instead focus on your progress. Write down your starting weight, and then weigh yourself once a week. Record your progress. Celebrate each pound lost. This is the true key to motivation in weight loss…and in budgeting.
Changing your budget mindset
As with maintaining a healthy weight, the overarching purpose of a budget is not to have a goal you reach, and then to go back to doing things the way you did before the budget. The purpose of a budget is to grow a healthy business (or household…the method I’m going to write about next week works for personal finances, too.) In order to do this, we have to view our budget as our friend, or at least as a helpful tool rather than a hateful shackle.
Your budget should not make you feel deprived, nor should it overwhelm you from the outset. Yes, you will have to be reasonable about your spending. However, by reverse engineering your budget, you can more easily see what you need to do to attain lasting fiscal health. And isn’t lasting health what we want in our business and personal lives?