Trade The Journey

Trade The Journey

Reformed Spender, Recovering Saver!

It’s hard to argue with reality. Sometimes the reality of your situation can hit you like a ton of bricks. At times I struggle to accept the reality versus what it is I would like to see.

Financial problems may arise in the dollar form, but the reality is that financial problems are truly caused by what we think.

Huh!

Allow me to elaborate.

Developing my trading plan caused me to revisit my expenses and real income. I usually keep track of my expenses through a spending plan, but I had no formulated budget. At the time, I saw no immediate need to develop a detailed budget.

I had a set amount that was saved each month, and I saved whatever I could on top of that.

Pretty good system, right?

Wrong.

Money started to slip through my fingers, as I mentioned in my previous post in small but steady amounts. Even though I’ve saved a decent amount of my income, I could have done much better. I had a goal for saving money but nothing purposeful.

That all changed when I committed myself to become a professional trader even if only part-time for now. I needed to know where my money was going exactly, but more importantly, I had to determine how much would go where.

We all are traders at heart. We trade and assess value consistently. When we enter the workplace, we trade our time to earn an income. Before accepting the job, we evaluate the value of the position, where it’s likely to lead us and whether or not we find the work meaningful. So the last thing I want to do is trade my time for an income only to squander it.

It took me an entire day to form a budget. I am glad I did it.  I initially thought of a budget as another roadblock to living life freely. I saved money regularly, so why would I need a budget?

How many times have you checked your budget in line at the store before buying your groceries?

 

For me, Never.

One purpose of a budget is to serve as a simple reminder of when you are spending too much. The numbers serve as price points. Points were paying an extra dollar begins to hurt your financial position.

Looking at it another way, spending under the price point provides you with extra money to spend or save for another area of your life.

Throughout the day, I compare the purchase I am about to make to the budgeted amount. It’s not an exact figure I remember but a roundabout figure.

For example, based on my calculations, spending $15 a week on eating-out will allow me to save $40 more each week based on my previous spending history. Going above the $15 price point means I’ll save less and this
could contribute to a future of increased debt.

Future in increased debt?

That sounds a little far-fetched.

Imagine if you didn’t even have a price point to compare your purchases too.
You’d probably spend whatever you felt comfortable with for the day.

Doing this over time means that your foregoing putting any money in your saving account or your saving whatever is remaining after your monthly spending.

An emergency comes out of nowhere, and now your spending more than $1 to buy something that is $1 because of credit card interest. It’s more like spending $1.25 to buy something for a $1.

Being guilty of this myself, I can appreciate how well the budget has been working. Debating where to purchase my sushi, I had to consider the amount I was allotted to spend per week.

Just $25.

What a bummer, I was used to spending whatever I wanted. Sometimes it was a lot, and sometimes it wasn’t. This is one of the few purchases I make monthly for personal pleasure.

Now, every week, I have a price point to compare my purchase too.  I know if I exceed that price point, I’ll have less to save and trade with.

 


This week I’d like to give myself a respectable “C” because of the strides I made to stick to my budget.

There were mistakes along the way, but that’s too be expected.

Another reason is effort is the first requirement in doing anything successfully, but it is one of many.

Thoughts? Corrections? Concerns?

Leave a Comment

Your email address will not be published. Required fields are marked *