BUDGETING IS BALANCING
I’ve had multiple conversations with people who feel and will argue that somehow there are hidden secrets about wealth, wealth building and getting rich. That rich people know something the rest of us do not. I cannot argue with that. It’s not really a secret, but it’s a matter of understanding money, how one views the money he or she makes and how well that person distributes (instead of spend) that money.
Money is a taboo subject because people do not like to be honest about it. They would rather lie about it than to have a real discussion about money. Most people are very aware of their bad spending habits, but justify them rather than change them. I know that was me! I wanted and do want it all! There is nothing wrong with ambition and wanting money isn’t the same as loving money! Oh and money is NOT THE ROOT OF ALL EVIL, the love of it is! (Read your word correctly People!) Never the less, wanting something doesn’t translate into having it nor does it translate into the ability to have! There is a process to ALL THINGS!
It’s the process people despise because it means delaying gratification, it requires living through hard times, it means being ‘without’ for a season. Budgeting is the beginning of the process of wealth building or just the beginning of financial stability! Without a budget, one cannot do anything successfully! Budgets set limits on expenses, projects the cost before they happen, provides boundaries for expenditures and all of these efforts help to ensure a maximum return on any investment! Limits aren’t all bad a good budget limits just how low your cash will drop BEFORE you cease operations from that particular account. In other words, a good budget followed well can stop one from living check-to-check! It requires one to prioritize, think before spending and in general plan for success.
Many people find it hard to budget because it makes them feel limited. It was just stated that budgeting sets limits right? However, if one viewed budgeting as balancing then it changes the entire idea of it. A good budget leaves room for a little of everything! I’ve never been a fan of extremes. Balance is always the goal!
A healthy budget should include:
1) Tithes (I’m a believer and a witness) Non-believers call it charitable donations
2) Savings – Keep it simple! Most people do not ever save because they want to do it big. EVERYTHING IS A PROCESS! EVERYTHING! To have a large savings means consistently saving, not dumping a lump sum into an account. Remember it’s about balancing. You can put money too far in any one direction and severely cripple your cash flow. Find a consistent amount to save every pay cycle, whether it’s $20, $30, $50, $75 etc…. Whatever your increment is, save that.
3) EMERGENCY FUND – Set aside another increment for emergencies. Different account, the more you save for emergencies, the less likely things that happen become or are label emergencies. We say emergencies because we are unprepared. In truth, the things we call emergencies are more like things we knew needed to happen (in the back of our mind) but weren’t prepared for or spent money hoping that they did not occur.
4) DON’T TOUCH SAVINGS – So far there has been two different saving accounts mentioned. These are not to be touched. The emergency account (only for emergencies) like: car repairs (car maintenance should go into the budget), repairs to your home, etc. The other saving account should leave your memory bank entirely. That’s the only way it can build.
5) Bill payment – never allow a creditor to hit the 30 day mark that’s when it hits your credit. Depending on your pay period, divide bills into half but keep arrangements made and that you make. MORE IMPORTANTLY THAN ANYTHING WRITE DOWN THE INFORMATION. One should never waste his brain creativity memorizing things that can be written!
6) Entertainment/meals – This category is lumped together for tax purposes and in any accounting software I’ve ever used. I suggest having a separate account for this purpose as well. First, include for yourself some entertainment that is within your budget. It is unrealistic to think you can’t or shouldn’t do anything for yourself. After all, that’s why you work! So plan those things. What usually happens is one enjoys the moment, it occurs sporadically and that can really throw a budget off. Don’t forget to include your gas for your auto right here as well.
7) Household – Always include your household spending in your budget. This serves as an accountability tool and can help one stop overspending at Walmart picking up items not on the list and maybe not needed.
Your ability to change your financial position will be as good as your budget. The budget should be written, planned in advance. Generally people plan or think about money before payday, once payday arrives, go back, review the budget and do the things on that list BEFORE doing anything else! Not writing down a budget is the worse plan! Spending in your head is never wise! It’s one of the reasons many people opt to not have checking accounts, they forget what they have purchase and without a record or a written budget, will spend again the same money!
Budgeting isn’t about restriction, it’s about balance! Achieving a healthy financial balance is good for all your basic needs: mentally, emotionally, socially and physically!
HAPPY NEW YEAR!
