I’ve heard people say “budgets are for poor people”. That couldn’t be further from the truth. In fact you’re less likely to be or stay broke if you do pay attention to your money.
What is a budget? Is it strict rules or limits on fun? It doesn’t have to be. A budget is simply a tool for you to tell your money what to do. If you want to eat out or buy that luxury item, put it in your budget. Granted you may find you need to plan for those large purchases or cut back on eating out to make the numbers work. That’s part of being financially responsible…(more on that in future posts).
Why have a budget? Have you ever noticed you might have more month left at the end of your check than you thought? Ever received that bonus or tax refund (more on why you shouldn’t get one on another post) and realize it’s gone before you know it? Where did it go? A budget will tell you.
“But I’m not a numbers person” you say. Really it is as easy as third grade math. Household budgets have two factors…income and outgo. That’s it. How much is expected to come in minus how much you know is going out. The goal for any personal finance is to have more income than outgo. In fact unless you are paying off debt you should be budgeting in savings and investing.
“I wouldn’t know where to start”. Well I’m old fashion and actually still write mine down then I put it into a spreadsheet. But in this internet age there is a plethora of budget apps available. One I’ve heard great things about is everydollar.com. It is a zero dollar budget app. Meaning you put your income in and write out where every dollar will be spent for the month. You will often find when you write down your bills you have more money than you thought. People have said they felt like they got a raise after using it.
“I don’t have time for all that I make enough money to cover my expenses”. Well maybe you do. But 8 out of 10 Americans live paycheck to paycheck. Meaning miss one check and you are in deep doo doo. Not such a great strategy in times like these with over 14% unemployment. Even if you are employed 6 out of 10 Americans can’t cover an unexpected $1000 expense. That’s a recipe for debt and disaster.
I get it. A budget isn’t sexy or cool. But being in control is. This is one step to making you the master of your money.
NOTICE: Mrs Locstar / Heather(“I”) provide general educational information on various topics on this website as a public service, which should not be construed as professional, financial, business, tax or legal advice. These are my personal opinions only. Please make note of our disclaimer
