My clients are not allowed to use budgets. Budgets imply lack and the existence of shortfalls. Budgeting can be a source of anxiety and stress. Budgets often create feelings of confusion, and they can be overwhelming. Substantial inaccuracies within budgets render them ineffective. My clients are taught to use a RAP, Resource Allocation Plan. The undertone of a RAP is one of gratitude and the necessary priorities for an individual’s life.
A RAP also allows an individual to maintain a realistic view of their resources and what is available. I personally believe that championing a cause and saving should be the top two priorities of an individual’s RAP. Housing is third. Transportation, if necessary, utilities, and food are next. Insurance and personal self-development follow, with discretionary spending at the bottom. Most RAPs should start with an individual’s primary source of income. Additional income streams should have specific assignments for which it will be allocated. Refer to the pie chart below for the allocation of primary resources.
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Nicole Michelle
Finance and Money Wiz
March 8, 2024
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