My fellow Passport Bros, please bear with me. I am going to draw a parallel between family budgeting and Hollywood film production. I know it sounds like a long shot, but please, read on!
‘Die Hard’ with a Budget
Once upon a time my screenwriting friend, Jason, and I were discussing the feedback we received from the same production company on our spec scripts. For second opinions we agreed to read each other’s script and see if we came to the same conclusions as to the feedback received from the production company.
My feedback had to do with the budget. The feedback I received very succinctly read:
“While we saw similarities to successful movies like Girl with the Dragon Tattoo due to the interesting characters and fast-paced mystery story, we felt the nature of the script went beyond [our] budget levels.”
So what does this have to do with the tea in China, or developing a financial budget for a family of four, you may ask?
You have to think about this from a wannabe Hollywood movie writer’s perspective. See, I stopped writing with a budget in mind after I finished my last independently produced film, Resurrection of Serious Rogers which is now being distributed through Filmhub.
In low-budget terms, and in contrast to Hollywood film finance, the film was made for pennies. I’d just come to terms with an incident years ago where one of my scripts was optioned and then passed on because it was deemed too expensive.
Poor Budgeting Caused a Missed Million-Dollar Opportunity
I was upset because no one asked me to revise the script to reduce the budget, something that I would have reluctantly done if it meant increasing my chance of getting produced by a big Hollywood film company.
One of the best lessons to be learned from independent filmmaking (or guerrilla filmmaking) is how to increase the film’s production value for next to nothing. As a writer/director, I’ve personally coordinated semi-legal production film shoots in unlicensed spaces to get that “impossible shot”. I’ve stolen shots on million-dollar marinas and trespassed in shipping yards to get a close-up of my actor exiting a half-million-dollar tractor-trailer.
The Proof is in the Budget
Two days after Jason and I swapped screenplays, he sent me an email that contained this note:
So far, I have mostly just nitpicky, proofreader-type notes, which is good. The only thing is, [the] budget is [low six figures]. Your script has spent that much in the first half. LOL.
He was generous. In truth, I had spent that [low six figures] on the first three pages of my script!
My first film scene (shot) was in the jungles of Tamil Nadu in India. My second shot was a race between Ducati Superbikes in a sequence that required a few hundred extras, a legit motorcycle club, and taking over several city streets at night. My third sequence was a violent riot in a women’s prison.
Again, you ask. What does this have to do with financial planning for a family?
I’ll explain. I was talking about writing a film project for a specific low film budget, the in actuality I was not writing with any budget in mind at all. That was the big flaw in my plan to write a low-budget film.
The Biggest Budgeting Mistake You Can Make
The flaw in your plan to write a budget for your family is that your plan is not based on a fixed budget at all. Your plan is based on the ebb and flow of your family’s finances as you know it, and often, want it.
This is the flaw in 99% of the household budgets that families of all sizes make. They don’t build a budget according to the minimum needs of their family. Instead, they create a budget based on their wants and desires. In doing it this way, they include certain creature comforts.
There’s no reason why the first scene in my movie (now a book) takes place in the jungle of Tamil Nadu in India other than, that’s what I wanted. I live in California. Can you imagine the transportation expenses of relocating hundreds of film production personnel almost 9,200 miles away?
What will you do with your Financial Budget?
Indeed I ended up rewriting my story several times to account for a budget expense that was far out of my reach. It hurt to do this. I felt as if I was cutting off parts of my very soul to fit this cramped, minuscule budget.
I’d bet that this is often how new budgeters feel when they realize the budget they’ve assigned to themselves has no room for savings, investments, or retirement planning.
Your budget has to include all these things. If you have children you may also want to include saving for college through a Roth IRA or a 529 Savings Plan.
There is no room for big-budget action sequences in your family budget planning. Your goals should be simple:
- pay down your debt
- save money
- create an emergency fund
- invest in your retirement
- set aside money for your children’s education.
In the film world, this simple design would be considered a talking-head movie budget.
Although your financial plans may meander and wander a bit, they should converge with a very specific goal in mind: to get to the end as efficiently and enjoyably as possible. This is exactly like the characters in a talking-heads movie.
Eleven tips to quickly bring your Budget down to reality
- When a traditional vacation won’t work, go local with a staycation
- Reduce your activities. Instead of budgeting for dining out once a week, change to once a month.
- Bundle services for extra savings when possible (insurance, phone, internet)
- Use apps to automatically search for discount codes and points.
- Expensive hotels are beautiful, but a bed is a bed, Plan to stay outside longer and keep the room just for sleeping and bathing
- Prioritize home cooking over take-out
- Use cash instead of a credit card
- Road trip instead of taking a plane (if it’s feasible)
- Brown bag your lunch. A can of soup and a half-cup of rice goes a long way.
- Use a bicycle on weekends to save gas (and get exercise)
- Split your monthly grocery shopping budget into four smaller weekly budgets and then reduce by 7-10% each week.
Bonus Tips
- Sweet tooth? Make homemade cakes and brownies instead of ready-made ones. Save over 50%
- Use leftovers to supplement a future meal.
Conclusion
Family finances and budgeting don’t have to be a pride-swallowing siege. Small changes make a huge difference in the end. It’s like compound interest.
Family budgeting is something all families should learn. It’s an exercise that requires repetition to fully master. It doesn’t even have to hurt much. Small changes here and there can go a long way to improving your family’s financial standing. Whether you want to reduce your credit card debt, save money, or pay off a student loan, having a sound financial strategy is key to taking control of your family’s financial destiny and well-being.