Budgeting For Your Ultimate 2010

January 13, 2010|By David Lester

Get your Personal, Professional, and Material 2010 goals lists out that you’ve already worked on. Figure out which of them will be your priorities for 2010. How much will the first one cost? It could be a trip, new motorcycle, flying lessons – whatever your heart desires! Divide that by twelve. Write the number down on your Goal Budget. If it is not a substantial amount of money you can add more items and divide their costs by twelve. If some of your goals are large purchases, like a cottage, then it makes sense to amortize the cost over the number of months or years it will take to put together a down payment or to purchase the item completely.

This system works! Dream big and budget to achieve your goals. I saved $1,000 a month for a year to pay for a trip to Europe. Last summer I spent a month in Europe visiting all of the ancient ruins and historical sites, swimming in the Santorini volcanic springs, eating pork knuckle and sauerkraut in Bavaria, living the bohemian life in trendy East Berlin, and shopping my heart out in Sweden. I love Swedish designers and their clothes fit my build perfectly.

As you complete each of your goals, the next on the priority list will be added to the goals funding equation and divided by twelve. This process will continue until all goals with a #1 priority are achieved. Goals that do not cost anything, like reading, should still be on the list. They can be equally valuable to your happiness. 

Next, figure out how much you spend every week on things like groceries, gas, coffee, clothing, and eating out. The best way to figure this out is to take a three months average by going through your credit card and bank account records. This will be a huge learning opportunity for you. When I did this I learned that if I had two coffees a day at $2.05 it was costing me $4.10 a day, $20.50 a week, $82 a month, and $984 a year! Eating out for lunch at $10 a day cost $50 a week, $200 a month, and $2,400 a year. If I were to cut out coffee and lunches, I would have another $3,384 for a trip to hang out with penguins in the south of Chile or to buy three really nice suits.

Write down all of your monthly variable costs and figure out how much you are spending a year on those items. Good ones to watch are your total automotive costs, clothing, restaurant bills, and bar tabs. When you are looking at the yearly totals you will realize that if you eliminate or reduce those expenses you will have new sources of money to invest in yourself. Pump those savings back into your own happiness.

And that is how I scrimp on the everyday stuff to get my tooshie back to Europe.  Hope you got value from the post. Next weeK I’ll be talking about what everyone is thinking about after the Holidays — debt busting.  Yee haw!  



David Lester
About David Lester

David Lester is a best selling author and professional Financial Coach, helping people be better with their money. David has written a personal finance book that breaks with traditional attitudes towards finance and describes his own philosophy to money that he has gained through his personal and professional experiences. His philosophy on money applies to many areas of everyday life, including banking, investing, goal setting, shopping and entertainment.