Now, I’ve talked a bit about budgeting in my post It’s Budget Making Time about getting your finances in order for the new year, so I want to go in a bit of a different direction for this post.
I love the budget I created for myself. I did my research; I’ve tested it out for more than a year and I’ve rarely wavered from it. That being said, as perfect as I think it is, I don’t think budgets are one size fits all.
I know this because a while ago I had a friend who asked me to help him create a budget for himself so he could pay off his student loan quicker. It was a challenge because he also had credit card debt and a modest income, but we wrote down all of his expenses, crunched some numbers and figured out a budget that I thought worked.
The thing is, everyone has different priorities when it comes to budgets. For me, getting rid of debt is the most important thing you can do. I mean, if I had to sacrifice buying new clothes, cutting my hair and living in a very dark basement suite for a year just so I could shave off a few years of paying down debt, I would. Actually, that’s exactly what I did last year, only I had already paid off my debt the previous year, so I was more focused on finally putting money in the bank for once.
Then again, perhaps when it comes to budgeting, I can be sort of an extremist. As much as my friend appreciated my help, he realized his priority wasn’t so much paying down debt, but figuring out which debt he should pay off first and how to afford to start a travel fund at the same time.
So, he took my budget, moved around some numbers and made it his own. He decided to focus on paying off his credit card first as he realized he was paying astronomical interest charges and fees, and then would put away at least $50 every paycheque into his travel fund.
In less than 6 months he successfully paid off his credit card and made sure to cancel it. As for his travel plans, he decided to work overseas as an English teacher so he could experience living in a different country and be able to travel on weekends.
This way his round-trip flight and accommodation were already paid for, and the income he’d generate from teaching could go directly towards paying off his student loan. From what I can tell from all of the gorgeous photos of Vietnam he posts on Facebook; this was the best decision he could have made.
I guess the most important thing to remember is when creating a budget, it’s the final destination that matters, not necessarily the route you choose to get there.