‘Budget Mom’ Kumiko Love: 9 Steps To Improve Your Finances
Written by
Ashley Donohoe
Edited by
Nicholas Morine
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Before becoming a financial counselor, Kumiko Love, known as “The Budget Mom,” dealt with her share of financial challenges, including uncontrolled spending habits, around $77,000 in debt and difficulty covering small expenses. She tried different budgeting and savings methods before she created a system that led to financial freedom.
In a blog post on her website, she shared these nine steps for improving your finances.
1. Find Your Motivation
Since financial improvement requires ongoing sacrifices, having a specific reason for the process will help motivate you. Love advised, “Perhaps to help you clarify your WHY, you should think about that one thing that is so important to you that if it were gone tomorrow, it would be devastating.”
2. Set and Prioritize Goals
Love wrote, “I want you to map out your short-term goals (things to accomplish in the next 3 years); your medium-term goals (the next four to seven years); and your long-term goals (more than seven years out).” She recommended establishing an emergency fund as your first short-term goal and making sure all other goals are realistic.
3. Be Aware of Your Spending
Whether you watch your online accounts or use a budgeting app, always know how you’re spending your money. When you notice problematic patterns, reassess immediately and start making wiser purchase decisions to stay on track.
4. Use a Budget Calendar
Love recommended making a budget calendar for easier bill tracking. You would list your bill due dates and paycheck dates throughout the month to ensure that you don’t forget to pay anything — and that you allocate funds appropriately.
5. Develop a Realistic Budget
While you can customize your budget, Love created the straightforward “Budget by Paycheck Method.” She explained, “I determine what bills have to be paid with that check, how much money needs to be set aside to pay the rent or mortgage, and any other expense.” Just be realistic so you’ll stick to your budget.
6. Use Cash Envelope Budgeting
Love encouraged using the cash envelope budgeting method also recommended by other financial experts such as Rachel Cruze. You would set aside cash in envelopes for each of your expense categories and use that money for payments rather than turn to cards. The benefit is more mindful spending due to handling physical cash.
7. Attack Your Debt
With a budgeting plan in place, you’re equipped to identify your debts and decide on whether to pay them off by the smallest-to-largest balance (snowball method) or the highest-to-lowest interest rate (avalanche method). Love suggested dedicating a fixed monthly amount to use for debt payoff.
8. Maximize Your Retirement Contributions
For long-term financial security, commit to saving for retirement. Love instructed, “Invest 10 to 15% of your income as you strive to make the maximum contributions you can, while automating your savings.” You can use your employer’s plan, an individual plan or both.
9. Think About the Long Term
While handling everyday money challenges can feel like enough work, don’t disregard putting spare income toward the future. Love’s ideas included early mortgage payoff, your children’s college savings and general wealth building.
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