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Budgeting: The Root System of Your Financial Tree

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My number one goal with Atypical finance is to help you get complete control of your money, and I regularly partner with companies that share that same vision. Some of the links in this post may be from our partners. Read my disclaimer for more info.

Atypical Finance has changed quite a bit over the past four and a half years since I founded the initial blog. It is now a bonafide company with clients and revenue. The brand itself has grown. I’ve grown.

And the two core principles of Atypical Finance have grown.

There are two core beliefs that are baked right into the name and logo of the site. For reference, here is the logo:

Atypical Finance

Let’s go over each core belief.

Core Belief 1:
You Are Atypical

Google gives the definition of Atypical as “not representative of a type, group, or class.” If you’re atypical, you’re unique.

Essentially, everyone is different. Everyone is their own person. 

Those differences should be celebrated! Regardless of your race, color, gender, sexual orientation or preference, religion, beliefs, or the country you were born in, your uniqueness deserves to be celebrated.

You should be given the ability, tools, and education to succeed simply because you are a human being.

Yet, typical financial advice expects you to conform to a specific set of methods of managing your money.

It is my firm belief that we should be building our own budgets and managing our money in a way that is different from everyone else. You’re a different person than everyone else and your money should reflect that.

You need to build your budget in a way that is going to work for who you are and where you want to be.

My money, situation, and life are all different from you. As a person, I am different from you. That’s a good thing and that means the exact way I manage my money may not work for you.

The exact way Dave Ramsey says to do something may not work for you.

The same goes for Suze Orman, Tony Robbins, the little startup blog you just discovered, or any other person that gives money advice. It may not work and that’s ok!

That’s where being atypical comes in.

If we’re learning to be ourselves—to be atypical—with our money, it’ll be easier to maintain because it is based on who we are.

We’re not forcing anything—and that’s exactly how it should be.

Your budget should be different. The way you manage your money should be different.

What you spend on will be different. How much you save will be different. Your goals will be different.

All of this is simply you being you with your money. It’s atypical.

That’s why Atypical Finance teaches personal finance the way it does. My goal is to teach you how to figure out what you value, how to determine what sort of budgeting principles you may want in your budget, and how to mold your budget to fit around you personally.

Managing money this way makes it easy. It’s a lot more fun to set up, and it’s way easier to stick with. It comes naturally.

You will find that managing your money atypically will make it easier to figure out the rest of personal finance. And that brings us to the second core belief.

Core Belief 2:
Budgeting is the Root System of Your Financial Tree

Budgeting is the roots

Imagine that your personal finances are a tree. There are many different branches for different areas of personal finance.

There is a branch for your spending, a branch for your income, and a branch for your saving. You have a branch for debt payoff, investing, and your emergency fund.

There is one for saving up for retirement and for giving. Every area of personal finance has its own branch.

Except for budgeting.

Travel down the tree into the ground and you have the roots. This is where budgeting lives.

The second core belief of Atypical Finance is that budgeting is the root system of your financial tree.

Trees have some of the strongest roots in the plant kingdom—so strong that it takes a powerful tornado to uproot a sturdy tree. The longer a tree lives, the longer and more spread out the roots become.

There are two main functions of the roots of a tree. They are:

  • to keep the tree anchored, and
  • to pull nutrients and water from the soil.

Frankly, the roots of a tree keep it alive. Without them, the tree would not be able to get what it needs from the ground in order to survive.

And it would probably fall over before it had a chance to die from lack of nutrients.

Like a tree’s roots, your budget anchors your money. It keeps you on solid ground so you can live how you want and reach the financial milestones you have set.

Your budget also supplies the nutrients for every other area of personal finance. It takes the money you have in your budget, filters it through the trunk, and into the branches of your financial tree.

From budgeting, you are able to determine:

  • How much you can spend
  • What you can save
  • What you personally should save
  • How much income you need
  • How much of your money is spent on what you value and how much isn’t
  • The amount of money you can use to pay off debt
  • How much money your debt is taking away from your budget
  • How much you can invest and how much you should invest
  • What you can put toward giving and charity
  • What your lifestyle is like so you can start planning for that in retirement
  • When you want to retire
  • What areas of spending you can cut out
  • How much emergency fund you should have
  • Essentially, ALL other areas of personal finance

Cultivate your roots (your budget)—and help them grow strong and healthy—and you have a strong, healthy tree (every other area of personal finance).

This is the core belief of Atypical Finance—the root of what I teach (see what I did there? ;)). That doesn’t mean I won’t teach on other things, but a lot of it will tie back to this core belief of budgeting being the root.

I believe if your budget is strong, you will have the knowledge and confidence to manage your entire financial life.

Budgeting is NOT Depriving Yourself

David Bach, millionaire author of “The Automatic Millionaire” writes, “What budgeting boils down to is depriving yourself for the sake of your future well-being.”

I wholeheartedly disagree with that statement.

If you are budgeting the right way, based on who you are and what you value, your budget will actually be freeing. 

By budgeting you allow yourself to spend money on the things that you enjoy and keep yourself from spending money on what you don’t enjoy.

Good budgeting allows a balance of living life now while also planning for your future well-being.

There are many beliefs out there on what you should focus on in regards to your money. Most of them are good things to focus on, but won’t give you the whole picture of your tree.

Some people have you focus on income, debt, saving, cutting expenses, or any other area of finances. Many of them have good reasons why you should focus on each of these, however, they don’t work for everyone.

But remember, this sort of budget isn’t the typical kind of budget where I say “you should do this” and “stop spending here” because that is NOT budgeting.

That is forcing you to conform to someone else’s budget, and you want to be you. You want to be atypical and budget in a way that works for you.

I believe a focus on building your own budget is the best way to go and will work for everyone.

Budgeting Connects to Everything Else

With budgeting being the root of your financial tree, all other areas of personal finance connect.

Your budget transfers all of the resources it has through the trunk and into the branches, leaves, and fruit of your finance tree. It keeps it healthy and literally finances all other parts of your financial life.

It also works to keep all of that stuff grounded, healthy, and connected—your budget keeps everything anchored. If you have a strong budget, nothing will be able to shake down your finance tree.

It’s all connected. Let’s look at some areas of personal finance and see how they connect to budgeting.

Spending and Budgeting

Confession—I’m a spender. I like to spend money. Thankfully, we’ve been able to build spending into our budget.

Honestly, I think everyone needs to build some sort of spending into their budget. In my experience, we all need to be able to spend on what we value or we go crazy.

Spending on your values is key. I’ve built spending on what I value into my budget so I get to spend a little on me as well as work toward my goals.

Even people who seem to be able to not spend a dime on themselves and save a ton of money are actually spending on their values.

Their values are saving for their future (or for something in their future) so they are spending money on themselves and their future by saving money and setting it aside. 

Saving and Budgeting

Saving is one of my favorite parts of personal finance but it’s difficult when you are a natural spender like I am.

Like spending, building this into your budget is the way to go.

The easiest way to do it is to have an automatic transfer or direct deposit right into your savings account every time you get paid.

You can also treat saving like a bill so you’re “paying” it. This makes it a non-negotiable along with the rest of your bills.

Have you heard of the “pay yourself first” method of saving? It’s only half right. 

Paying yourself first involves you setting money aside in your savings account before paying your bills or buying groceries or anything else.

Try doing that when you’re living paycheck to paycheck and don’t have any money to spare.

What you’ll end up doing in this situation is bolstering your savings or retirement accounts while trying to make ends meet by using credit cards.

If you’re budgeting first you’ll be able to know exactly how much you should be saving.

More importantly, you’ll be able to determine how to save more money if you’re looking at your budgeted spending.

Using your budget as the root of your saving will help put your savings through the roof.

Income and Budgeting

Some people believe that income is the key to finance. I respectfully disagree.

While increasing income is a good thing and can provide some much-needed breathing room, it is only one part of your financial tree.

Take this scenario as an example.

Every month you feel the sting of not having enough to pay the bills. You decide that your income needs to be higher to help get you above water.

You search for a job and find one that gives you a 10% increase in your salary. Not bad! You take the job, and after a few months, you re-examine your financial situation.

You’re still not meeting all your bills!

So what can prevent a situation like this?

Budgeting first in this situation can help you in two different ways:

  1. You’ll know how much your income actually needs to increase. 10% may not have been enough in our example but a 15% increase may have been enough.
  2. You’ll be able to determine how much of an income you need for the life you want, too. By looking at your budget, you’ll be able to say something like “Hey, I like to eat out and value it and would like to do it more. A 15% increase would put my head above water, but if I get a 20% increase I’ll be able to do more of what I value.”

Allowing your budget to anchor what you do with your income will also help to prevent lifestyle inflation.

If you are paying attention to your budgets, you will be able to keep unnecessary spending at bay as your income rises and reach your goals faster.

Lastly, in some cases, you actually may need less income for whatever goal you’ve set.

When I have helped clients build a budget that’s right for them, there have been many times where they are actually surprised to know that they have more money than they thought they did.

Use your budget to help you know what to do with your income and determine how much you need to build the life you want.

Emergency Fund and Budgeting

Did you know that your emergency fund can be different than everyone else’s too?

Saving three to six months of your income, or a six to twelve months, or however long you’ve been told doesn’t work for everyone. 

There are a number of factors that will determine how much of an emergency fund you need—things like how much extra money you have each month, how secure your employment situation is, and most importantly, how big of an emergency fund you need to feel comfortable and safe.

I wrote an in-depth article on this if you want to dive further into it. 

In short, your current budget and what you want your budget to look like both play a roll in your emergency fund.

Debt and Budgeting

Using your budget to help your debt has a couple of cool benefits.

First, by budgeting, you know exactly how much money you have each month to pay off debt.

You can move your dollars if you need to, and like saving, you can make sure you’re not putting too much toward your debt and going into more debt by paying off your debt.

By budgeting, you will be able to have a solid plan for paying it off.

Secondly, and perhaps even more importantly, you will know how much your debt is taking out of your budget every month. 

At one point, after we bought our first home in 2012, I took on more than $800 in total monthly payments and completely derailed my get out of debt train.

If I wasn’t budgeting, I would have never known that all of my new debt was taking up such a big chunk of my overall monthly budget.

Knowing that put a huge fire under me to pay it off as quickly as possible.

Try budgeting first, then you’ll know what your debt is doing to your money and how fast you’ll be able to pay it off.

Retirement Planning and Budgeting

While saving for retirement, budgeting will pave the way for success.

Like debt and saving, your budget will help you determine how much you have to invest and save for retirement. It’ll also help you do it without sacrificing too much of your life now.

Balance is key and you will be able to get that with a budget.

Another HUGELY important aspect that budgeting will help with is knowing how much you need to save for retirement.  

Knowing your budget now, how it feels, how much breathing room you have, how much you get to do the things you value, all of this plays a role in planning for retirement. 

For example, you may be someone that loves to travel. With your current income level, you may not be able to travel as much as you’d like.

Knowing this, you may need to save up more money for retirement than you thought.

You can also plan for things based on your budget. 

For example, most experts recommend not having a mortgage when you retire because not having one frees up a lot of income. You can plan for this in your retirement budget as well.

Budgeting first—and realizing how much you need to save for retirement while living life now—can also help you determine if you need more income now to get the life you want.

Budgeting well can give you insight into what your budget might look like in retirement, what you want your budget to look like in retirement, and help you determine what you can save right now.

Giving and Budgeting

Ah, giving. I love giving. For a long time, my wife and I have given to a ministry whose mission we believe in. We also enjoy taking people out for dinner and blessing others.

It feels amazing and is one of the ways you can take your budget to the next level.

Giving is something that I like to treat as a bill. We set a certain amount aside for giving every month and use that to bless others. 

That wouldn’t be possible without budgeting.

While I do believe there are times when you have to give by stepping out in faith to give, I also believe that it’s important to plan for your giving.

With budgeting, you can give as you are able to without hurting yourself. Like anything else, if you’re giving more than you are able to, it isn’t sustainable. Continue to give more than you are able and you won’t be able to give anymore. 

Budget well, and then you’ll know exactly how much you are able to give.

Budgeting: The Root System of your Personal Finance Tree

I wholeheartedly believe that budgeting well and in a way that will work for you can help us break through most of the hardships we face in every other area of personal finance.

Budgeting is the root system of your financial tree.

Take care of your budget, keep it healthy, keep it living, and budget the best way for you, and you will be able to manage every other part of your finances your way.

You will be able to stick with it long term, reach your financial goals faster, and build the life you want—all from budgeting the right way. All from budgeting your way.

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The person behind Atypical Finance

I'm Tim Jordan

I’m an author and certified financial coach who cares most about the same thing you do—getting YOU where you want to be in your financial life.
 
I don’t just teach money principles. I teach you how to take these principles, mold them to fit who you are, and build the life you want. It wasn’t until I stopped trying to fit into a financial mold that I was able to gain complete control over my money. Now, I want to teach you how to break that mold in your own life and and help you reach true financial freedom.
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I'm Tim Jordan

I’m an author and Certified Financial Coach who believes that everyone’s personal finances should be as unique as they are. Everything I create, write, and share is designed to help you find true financial freedom, whatever that may look like for you. 

My number one priority is to not only teach you money principles, but to teach you how to take these principles, mold them to fit who you are, and use them to build the life you want. 

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What's Next?

Want to pay off your unnecessary debt?

Check out my ultimate guide on creating your own debt payoff plan. Step-by-step instructions show you exactly what to do.

Ready to create a budget you will actually stick with?

Coming Soon! Create the last budget you will ever need in 5 simple steps and use it to build the life you want. 

Need to build your emergency fund fast?

I show you why you need an emergency fund, how to figure out how much you personally need, and how to build it fast.