Badass vs Dumbass
Master your Financial Kung Fu to be one and not the other.
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👉Go to Sifu’s Notebook for Stay Calm and Budget On: Easy Tips to Manage Money Without Going Crazy
Primer: Who are Sifu & Ronin
Episode 47: Ronin Falls Into The Abyss!
Ronin: Sifu! Don’t kill me, but I’m starting to hate doing this “budgeting” bizniz. It’s so depressing, man.
Sifu: Hmmm. Seems like you need a refresher on why it’s essential to even do it in the first place. Then we’ll go over how to make it less onerous. It’s def sustainable, even for a dumbass like you. Just requires a little discipline. Maybe you can find some in your big ass pant pockets.
Ronin: Easy cowboy! My big pant pockets are fantastic for my jumbo snacks I take to the movies. BTW, I have plenty of discipline. But should I waste my time staying on top of this budget everyday. Seems endless and hopeless.
Sifu: The path to wisdom starts with small steps. Let’s walk the path again, one step at a time. Don’t want you to trip over your pants. Hee-hee.
Ronin: Haha. Good one, boss.
Sifu: Let’s start at the very beginning. The discipline of budgeting is like Kung Fu for your wallet. Without it, your finances are wild and chaotic, like a drunken dog. Are you a crazy intoxicated bark machine, Ronin?
Ronin: No man! Sober AF.
Sifu: Excellent. If you’re equally sober with your money, you’re already on the path. Because budgeting controls your money, you benefit from reduced financial stress and this helps you achieve your goals. Peace and success, dude. Feel me?
Ronin: Well, if you put it like that, it is appealing. I like my sense of calm, and if it’s coupled with a successful journey to early retirement, then those are good points. You selling it like a boss, Sifu! You a super salesman in your other job?
Sifu: Ha! Everyone is in sales, #1. Not everyone is good at it though. Knowledge and confidence are key to delivering a compelling pitch. Kind of like your ability to easily talk to strangers, especially ladies. It happens because you know how to talk to them. That along with your confident swagger. Those are the keys to the kingdom.
Ronin: Wow, nice.
Start Simple
Sifu: You must not complicate things at the start. Use something basic like the 50/30/20 rule.
Ronin: Sounds like the proportions of sadness in my life. 50% stress, 30% anxiety, and 20% regret.
Sifu: No, man. 50% for needs like housing and food, 30% for wants like your entertainment, and 20% for savings and debt repayment.
Ronin: Ok ok. Done.
Automate What You Can
Sifu: Automation is key. Set up automatic payments for bills, savings, and debt.
Ronin: Ah yes, let AI and the robots take over my life. Remind you of Skynet, boss?
Sifu: Haha – not quite. Not yet anyways! Right now, automation frees you from the temptation of spending money meant for savings. It’s like having a wise elder manage your finances for you.
Ronin: So automatically remove my excess cash, so there’s nothing left to spend. Sheeeeit!
Track Your Spending, But Don’t Obsess
Sifu: You must track your spending, but do not obsess over every penny. Use apps to track your spending automatically. It’s like keeping your enemy close so you can see their every move.
Ronin: Seems I’m always fighting for my life!
Sifu: Once you track your spending, you’ll see the patterns, and you can adjust your budget.
Ronin: Oops. I already know about that pattern where my money mysteriously disappears after 3 beers.
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Sifu: Precisely. Knowing the enemy is the first step to defeating them.
Build Flexibility and an Emergency Fund Into Your Budget
Sifu: Life will always surprise you with unexpected expenses. You must build flexibility into your budget.
Ronin: Oh! That I like. I won’t feel so boxed in if there’s some give and take to this budgeting thing.
Sifu: Yes sir. But, you’ll also need an emergency fund. A cushion for when life strikes.
Ronin: So you’re saying I need a financial safety net because my life is basically a circus act?
Sifu: Ha! Your life, yes. But with enough practice, you will walk the tightrope of life with confidence.
Photo by Casey Horner on Unsplash
Ronin: Or slip and fall into this imaginary net, screaming for my life!
Review and Adjust Monthly
Sifu: At the end of each month, review your budget. See where you succeeded and where you can improve. It’s about learning and getting better.
Ronin: Well, I’ve learned that my taste in snacks is too expensive.
Sifu: Then adjust. If you overspend in one area, reduce spending in another.
Ronin: Ai-ya! Blowback from splurging is a beyotch!
Celebrate Small Wins
Sifu: Celebrate small victories, like paying off a debt or reaching a savings goal.
Ronin: You mean like celebrating when I successfully don’t buy 10 things I don’t need on Amazon?
Sifu: Precisely. Reward yourself in small ways to stay motivated.
Ronin: So I should treat myself to a $5 latte after saving $10? The math checks out.
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Sifu: Pfffft. Your financial life is basically a game of one step forward, two steps back. You have to be careful that your rewards don’t undo your progress.
Ronin: Aight! Heard! Getting ahead is only real if I don’t keep falling back. I get it. Gonna smarten up. First can we celebrate a small victory, bossman?
Sifu: Uh-oh. I’m afraid to ask. What victory is this?
Ronin: We made it through the lesson, and you convinced me to stick to the program. I didn’t quit – that’s a WIN in my books!
Sifu: Hahaha. Ok, you win … this time. According to your budget, you’d better save your hard-earned pennies. Lunch is on me today, #1.
Ronin: Yesssssssssssssss! Best teacher award goes to you … again!
Sifu: Hee-hee. Who’s the super salesman now?
Sifu’s Notebook
Stay Calm and Budget On: Easy Tips to Manage Money Without Going Crazy
1. Understand Why Budgeting is Important
- Helps you gain control over your finances.
- Reduces financial stress by preventing overspending.
- Enables you to allocate money toward your goals (e.g., savings, debt reduction, vacations).
- Provides a clear picture of where your money goes every month.
Tip: Frame budgeting as a way to empower yourself, rather than as a restriction.
2. Start Simple
- You don’t need complex spreadsheets or apps to start budgeting.
- A basic method like the “50/30/20” rule can be a good starting point:
- 50% of your income for needs (housing, food, utilities).
- 30% for wants (dining out, entertainment, hobbies).
- 20% for savings and debt repayment.
- This method simplifies your finances and makes it easier to track categories.
Tip: Once you master a simple budgeting system, you can add more detailed tracking if needed.
3. Automate What You Can
- Use auto-pay for fixed bills like rent, utilities, and debt payments.
- Set up automatic transfers for savings, retirement contributions, or emergency funds.
- This removes the temptation to spend money meant for savings or essential bills.
Tip: Automation not only saves time but also minimizes human error.
4. Prioritize Your Financial Goals
- Make a list of your short-term and long-term financial goals.
- Short-term: Emergency fund, vacation, paying off small debts.
- Long-term: Homeownership, retirement, college fund.
- Prioritizing helps you stay focused on what truly matters financially.
Tip: Revisit your goals quarterly to assess progress and make adjustments.
5. Track Your Spending, But Don’t Obsess
- Tracking your expenses is key to effective budgeting, but you don’t need to track every cent.
- Use budgeting apps like Mint or YNAB that automatically categorize spending for you.
- Review your spending weekly or monthly to spot trends and areas for improvement.
Tip: It’s okay to go over budget occasionally—what’s important is adjusting your spending or budget the following month.
6. Build Flexibility Into Your Budget
- Life happens, and unexpected expenses will pop up (e.g., car repairs, medical bills).
- Build a cushion into your budget for these “miscellaneous” or unpredictable costs.
- Having an emergency fund (3-6 months’ worth of expenses) is critical for covering large unexpected expenses without derailing your budget.
Tip: Budgeting is not rigid. It’s important to stay flexible and adjust as needed.
7. Use Cash Envelopes for Discretionary Spending
- The envelope method helps curb overspending on things like dining out, entertainment, and shopping.
- Withdraw cash for these categories, and once you run out, you can’t spend more.
- This system works well for those who find it easy to overspend with cards.
Tip: If handling cash is inconvenient, digital versions like prepaid cards or app-based trackers can work too.
8. Review and Adjust Monthly
- Make a habit of reviewing your budget at the end of each month.
- Compare your actual spending against your planned budget to spot any discrepancies.
- If you’re consistently overspending in one area, adjust your budget for the following month.
Tip: Treat this process as a learning experience, not a failure if something goes wrong.
9. Celebrate Small Wins
- Budgeting can feel like a grind, so it’s important to celebrate milestones (e.g., paying off a credit card or reaching a savings goal).
- Treat yourself to something small when you hit these milestones to stay motivated.
Tip: Rewarding yourself reinforces the positive behavior and keeps you engaged in the process.
10. Budgeting Should Evolve With You
- Your budget needs will change as your income, expenses, and life circumstances change.
- Adjust your budget as you get a raise, change jobs, or take on new financial goals.
- Being adaptable ensures that your budget always reflects your current reality.
Tip: Avoid the temptation to inflate your lifestyle as your income increases—continue prioritizing savings and debt repayment.
Conclusion: Make Budgeting Work for You
The secret to budgeting without losing your mind is simplicity, automation, and flexibility. Start with a basic framework, automate where you can, and focus on progress over perfection. Budgeting doesn’t have to be a stressful process—it can be a powerful tool to help you achieve financial peace.
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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.
