If you don't want to settle for an average life, you have to embrace one fact about money

Flickr / Peter Harrison

The whole point of budgeting, besides getting an A from yours truly, is to figure out how much “extra” you’re playing with every month. When all your bills are paid, how much do you have left over? Or an even better question to ask yourself — is there *anything*?

As crazy as it sounds, your boy J. never cared about budgets until just a few years ago. Or even money in general for that matter.

In fact, if you were to ask me back then I would have told you I was The Man when it came to this stuff. Which was a) hilarious considering I was actually living paycheck to paycheck, and b) scary since I didn’t even know how much I was spending every month! And if a financial catastrophe hit? I would have sheepishly went running straight to the Bank of Mom & Dad.

You see, paying your bills on time and having enough to get by is fine if you want an average life. But if you’re looking for something MORE — something that you can hold onto and really build on over time — then “average” isn’t going to cut it. You’ve got to challenge everything and dig in to find where you’re leaking money. Where you can save more here, and chop off some more there. A habit to get into even when your finances are on track!

And the motivation you’ll need to see it all clearly is that number at the very end — the totals that shows you whether you’ve got $XXX left over or you’re going $XXX more in debt. THOSE are the numbers to focus on. Breaking even at $0.00 is still living paycheck to paycheck. What you really need to be working towards is getting that gap into the positives. The more you focus on that, the closer you’ll get to retirement. Or your dream house/boat/house boat/car/million dollar nest egg, etc.

For me, those totals were bright red. Every paycheck I received, no matter how many raises I got or new careers I tried out, I was losing money. It wasn’t enough to notice at first ($50 here, $90 there) but eventually it would have caught up and slapped me silly. How the hell could I be financially free if I never SAVED anything?! It’s just not possible. If you really want to be financially successful, you’ve gotta be bringing in more than you’re letting out. Plain and simple.

And the budget, as boring as you may think it is, will point you in the right direction. What a lot of people don’t get is that it does more than just show you how much your life sucks — it shows you how it could be BETTER. It’s the whole “ya gotta see the bad so you can see the good” kinda thing. The “knowing is half the battle” G.I. Joe type stuff. Even if you only follow a budget for a month or two you’ll learn more about your spending habits — way more than you will by reading this blog or any of those killer finance books out there.

And you know why? Because we’re all different. We all have our own way of living, our own way of spending, and our own plans for retirement. We’re all unique snowflakes, as our mother’s like to say, and your numbers will look completely different than the next person’s numbers. But you have to know what numbers you’re dealing with or it won’t really matter in the end.

Whether you choose to budget or not, at least find out how much you’re gaining, or losing, every month. And actually run the numbers — don’t guess like I used to do and think you’re coming ahead every month, only to find out later that you were leaking over $200 a month like an a--hat. This is the number that’s key to your success. And until you can determine it, you’ll have a helluva time reaching those sexy dreams of yours.

PS: If you are looking for a budget to start on, try out the one I use, or any others from the list of great budget templates/spreadsheets I’ve collected over time. Some are kinda purrty…

PPS: Can you tell this was a post I re-published all the way back from 2009? ;) As you can see, money doesn’t change in five years, nor will it in 50, 500 or 5,000 either. Our net worth sure can, though!

NOW WATCH: Richard Branson tells the story behind his famous kitesurfing photos