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Be Creative With Budgets

How to Get Crafty With Your Budget

Editor's Note: The following is a guest post by Kimberly Palmer, the author of Generation Earn and creator of The 2012 Money Planner, available on Etsy. She is also the personal finance columnist at US News & World Report. Take it away, Kimberly!

I’ve always been a sucker for self-improvement books, which is why I almost always have a huge stack next to my bed. So many of them seem to start with the same premise: You can’t reach your big goals without first defining just what they are. Many of my favorite authors urge a visual approach, with instructions for creating a vision board by cutting up favorite images from magazines and catalogs and gluing them onto a poster board.

When I was working on my own vision board recently, I suddenly had a flash of inspiration: What if we created vision boards for our financial lives? If creating a visual image of our goals is so helpful in regular life, then couldn’t it help with our money, too? After all, personal finance can get a little dry when it’s all about numbers. People who prefer art to math might like this approach better.

So I set to work coming up with a more creative and visual approach to managing money, which I ended up publishing in my new line of money planners, which are available on Etsy. In addition to vision boards, I focused on visual methods for thinking about spending, budgeting, and paying off debt. And as I learned more about how right-brained people like myself think, which tends to involve focusing more on the big picture and less on the details, I made sure to keep the emphasis on that big picture.

Here’s one exercise you can try right now: On a sheet of paper, draw a big circle for each of your main money priorities. They might be housing, food, and transportation. Then, draw smaller circles for other expenses that weigh on your budget, with the size of the circle indicating how important the expense is to you. You’ll end up with bunch of circles, all of differing sizes, that reflect your budgeting priorities. If you have time, color code them as well, with one color for necessities, another for “wants,” and a third for luxuries.

Read on for more on being creative with your budget.

The next step involves figuring out how those priorities match up with your actual spending, which you can do on a website such as Mint.com, which itself takes a colorful, right-brain-friendly approach to managing money. The trick for right-brainers is to get started with money management in a fun, creative way, so you aren’t immediately turned off by all the numbers and details involved.

It turns out the idea of financial vision boards was so good that I’m hardly the first person to think of it. If you run a web search for “financial vision board,” you’ll find all sorts of websites and even YouTube videos with examples and instructions.

When I created my own financial vision board, it was filled with images of cozy homes, organized desks, and nature —pretty much the same images that went onto my regular vision board. When you’re thinking “big picture,” getting on top of your money and your life turn out to be the same thing.

Source: Thinkstock
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