Money Monday: Day 10 – Surplus or Deficit?

30 Day Money Challenge – Day 10: Surplus or Deficit?

If “ ‘mo money, ‘mo problems” is your motto, this blog probably isn’t for you. However, if you frequently wonder, “where did my money go” or find yourself with nothing left over after the bills are paid, you are in good company. Most adults fall into this category with 69% reporting that they would not have $1,000 to cover emergency expenses like car and home repairs or unexpected medical costs (even the minor ones). 34% of those adults have no savings at all. Even though it is normal to be financially stretched to the max, that does not stop us from worrying about the what-ifs. So why is it so hard to manage this critical part of our lives?

It is hard because we make it hard, but hopefully, we can help simplify it. Take a look at the equation below:

(Income) – (expenses )= surplus J or deficit L

The goal is to have a positive number at the end of that equation. There are a couple of ways to get there, but you have to follow one simple rule: The first number (income) has to be bigger than the second number (expenses). That number is going to be our focus for this post. There will be more on the rest later so stay with us.

When you go to target for laundry detergent, does the receipt mysteriously end up totaling $175? If your answer is yes, then you may have realized that over time, we develop habits that impact our financial equation and they begin to shape our attitudes about money. Maybe you have started to believe that making a budget is a waste of time because overspending makes it hard to be successful.

The first thing you have to do to take control of your finances is ask yourself what you want out of life. That may seem, like a huge question to ask when you are working on a budget, but your finances are what will get you there. We all have a limited amount of time and money (unlike Biggie), so we have to be strategic about how we use those resources. If your job is a drag and you are already counting down the years (or decades if you are a millennial) to retirement, then contributions to your investment accounts should be a top priority every month.

Turning down a night out, wearing last season’s clothes, or drinking crappy coffee is hard, but it is easier when you can focus on what you will have later on because of those sacrifices. By creating a plan for your money, you will know if your purchases are

worthwhile even before you reach for your wallet. Soon, you will have a financial cushion for protection when one of those “what -ifs” sneaks up on you, and you will be living a life that supports your biggest goals and dreams.

This blog will cover everything you need to know about managing your finances and using them as a tool to reach your biggest goals. Setting a budget is not hard, but there is a lot to think about, and we will cover it all.

>>Ashley Samson-O’Connor is a nonprofit administrator and a freelance writer

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