I was reading that crazy little publication “Stages” that Fidelity Investments sends to people who are enrolled in a 401K administered by Fidelity. It is a small quarterly publication that seems to want to educate people at the most basic level about financial issues and investing. The articles are written for the novice and the slant is toward Fidelity offerings as you’d expect. What drives me most nuts about this magazine are the people they profile. These 20, 30, and 40 year olds who are saving 25% or 30% of their income and are poised to retire anytime now. While I commend anyone who can have both partners each saving that sort of dough, I find these profiles utterly impossible for the rest of us to relate to. Not to mention, I’ve never seen anyone or anything queer even sneak into the margins of the magazine. Guess that means there are no queers working for companies or in 401K accounts with Fidelity. Well, that’s what their magazine would lead you to believe anyway.

I did run across an interesting little article about budgeting, however. I particularly liked two of their 7 steps for budget success and I thought I’d share them here.

Adjust Your Attitude

The article suggests to view a budget not as a constraint or stop sign for spending. Instead consider it a way to spend your money on the things that matter most to you. I love this suggestion because everyone, whether they make millions or several thousand, has a limited amount of money to spend. If that’s the case, why not maximize your fulfillment and satisfaction of those dollars and your hard work and make sure you spend them on the things you value and desire most. I would even lump in the necessary expenses into things you value. While you probably don’t love paying the mortgage, I bet that you value having a roof over your head and a place you can call home. Perspective is everything and if you know your parameters (the budget) you can work within them to squeze the most juice from every dollar you have.

Distinguish Between Wants and Needs

Their text under this tip is totally lame. What I will share, however is that this is a key distinction. What do you really need to spend your money on? What is variable and flexible? What is purely for joy? Many books will say figure out what you need, pay the variable stuff and the trickle down that is left (who has money just left??) is for your enjoyment. This is no way to live over the long term. You end up feeling deprived, end up in a hate relationship with money management, and totally give up on budgeting or anything remotely related to a conscious and intentional approach to money. So how do you avoid this pitfall?

Make sure you always pay yourself first for savings. Then, take a hard look at what you need to spend money on and then (where you can) negotiate price or make savvy choices to limit what needs to go out. Once you have those needs well in hand, start attacking the variable expenses with the same mindset knowing that these are often “wants” and can be eliminated. If you choose to keep them, make sure you are clear why you are keeping them and what value it brings to you. For example, you probably don’t need a high price cell phone plan. Yet, if it allows you the freedom to conduct business on the road or build your business in the cracks of your day job it might be worth it. Again, be as savvy as possible to get the best deals. If you take this approach to the needs and wants, you end up with more money just for the joy factor. In my opinion maximizing the amount of money available to me for the joy factor is a great measurement of how I am handling my money.

If you start approaching budgeting in this way, it will no longer feel like drudgery or something that restricts how you spend. Instead, you get to free up more energy for the things you most enjoy.