You Need a Budget
“That’s not in my budget.”
“My budget is already stretched thin.”
“I’ll have to check my budget to see if I can swing that expense.”
How many times have you said something like one of the above statements? People reference their budgets all the time, but the truth of the matter is that people who actually compose a budget and stick to it are in the vast minority. In reality, most people who say that something isn’t within their budget are actually saying that they just don’t think they can afford the expense, although they probably wouldn’t be able to tell you how they would have to adjust their budget to make it feasible.
Why should you actually take the time to compose and follow a budget? There are a few reasons:
1. You’ll never know where your money is going if you don’t tell it where to go. Does money seem to just disappear out of your life and you’re never quite sure where it has gone? Does it seem to you as though you should have access to more money based on your income, but you never have enough? In all probability you’re spending money on a lot more unnecessary expenses than you realize. Once you realize that you’re wasting a lot of your money you’ll be able to tone down the spending considerably.
2. With a written budget you can plan your spending better and make a concerted effort to pay down debt. If your plan right now for paying down your debt involves throwing whatever extra money you have toward your debt, it probably doesn’t work very well if you don’t have a written budget. In fact, most people in this situation wind up not having much money at all to put toward their debt by the time the end of the month rolls around. A written budget will do wonders for your debt-paying ability.
3. If you actually follow your written budget then you have a good chance of getting your finances under control. Many people make more than enough money to get by while also paying down their debt, but without a written budget a good number of these people just don’t think they have enough money to do so. A written budget spells out how to cover all the necessary expenses while also attacking debt. Following a written budget may feel extremely restrictive in the first few months, but it soon becomes easier as you notice the progress.
Have a written budget that you actually follow is one of the best things you can do to get your personal finances under control. You may be shocked to find that your income is more than enough to support you while also paying down your debt as long as you’re willing to make a few sacrifices from frivolous spending.
Tomorrow: How to Write a Budget
