Having a budget is essential if you are looking to get out of debt, efficiently “spend” your income and create wealth. Who doesn’t want to accomplish at least one if not all of those things? Without a plan for your money a.k.a, a budget, how do you expect for your money to work for you vs you working for it.
I approach having a budget not from the perspective of limitation and scarcity but from the outlook of abundance and freedom. Knowing exactly where my money will be spent and how much of it I have on an ongoing basis is an incredibly relaxing and freeing feeling. Instead of worrying if I have enough money to pay for an item or bill when it comes up, I can rest easy knowing every dollar has a purpose.
A budget helps you plan most if not all of the expected expenses in your everyday life. It can even help you get through emergencies and situations that you can’t plan for.
If you don’t have a budget and were like me when I didn’t have a budget, I can guess that you don’t know where all of your money goes by the end of the month. The feeling is comparable to a dripping faucet leaking out water; just in this case, it’s your bank account leaking out money. Or better yet it can feel like a cup with a bunch holes in it, just dispensing water or in your case, your funds (see video below for a visual demonstration).
For the occasions where you have more than 1 emergency or bill hit at the same time, it can feel like an avalanche of bad fortune and results in a feelings of helplessness or anxiety. This is how a budget is helpful; to allow you to take back control over the way you not only view your money but the way you spend it.
You can choose to stay flying blindly and complain about the lack of money you have available to make your dreams come true or you can choose to regain control of your life.
At first you may have to hustle to get everything back on track depending on how far you let things spiral out of control when you didn’t have a plan in place. That may mean a few months of just simply tracking your spending and making more deliberate money spending decisions. Once you have a realistic idea of what your actual bills and expenses are you can begin to build your budget.
Stay tuned for my next blog post where I show you the simple steps to starting a budget.
In the meantime, I will leave you with this clip from Two And A Half Men
Don’t be Charlie, manage your cash-flow and recognize the importance of a budget!
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I agree – not having a budget is like stumbling around, in the dark, with your eyes closed hoping you make it to your destination. Like you say a budget is not limiting in the slightest, it is planning where your money is going.
You can even budget some fun and luxury in there, without feeling guilty.
Love that analogy “stumbling around in the dark”. Thx for reading!
I’m glad you liked it 🙂 I think it’s a good one because in the dark, you MIGHT be getting closer to the exit, but you have no way of knowing. If you’re not tracking your expenses, you MIGHT be saving money very well, but it’d be better knowing for sure.
Spot on… Our budget, especially the fun part of the budget gives us all the freedom we need to go out and eat, buy stuff,…
It does take some time to track and set up a budget. Once the habit settles, it is soooo liberating
I completely agree. i find budgets so freeing, I could not imagine living without a budget. They make me feel in control of my life, instead of the other way around