Are you afraid of the word “budget?”
Honestly, most of us at some time have heard that word and felt a little intimidated. And it’s often when we least have the money to do any budgeting. That’s when we need to budget the most, of course. Budgeting is one of the biggest and most important keys to getting the most out of your money. It always has been and it likely always will be. The English writer Charles Dickens even wrote a famous line for his character, Micawber.
Annual income, 2o pounds ($30), annual expenditure 19 pounds 10 shillings ($29), result, happiness. Annual income, 2o pounds ($30), annual expenditure 20 pounds sixpence ($30.25), result, misery.
In modern talk he was saying “Spending a little less than you earn is a good way to behave”.
You don’t have to associate the term “budget” with hassle, headaches, or restrictions on your ability to spend money as you please.
The truth is that budgeting can make it possible for you to spend more money on the things that really matter to you! When you learn how to make the most out of your money, you enable your money to work for you, rather than the other way around. Yes, your money should be working for you.
Consider these benefits of budgeting:
1. Budgeting prevents overspending. When you don’t have a budget in place, it’s way too easy to overspend. This puts limits on your spending power for future purchases and requires you to apply more money to repaying debts every month.
If you’re worried about the idea of restricting your spending, then consider what life would be like if you have to apply more and more of your paycheck to repaying credit cards every month, without end!
2. Budgeting shows you how to save money. When you budget, a primary task is to assign money to meet specific needs. This allows you to ensure that you are automatically investing or saving a certain amount of money every month.
This simple task is all you need to begin building wealth.
Quick true story: some years ago I was pretty broke and got into trouble with my bank. They took my ATM card and checkbook off me and I had to go to the branch any time I wanted cash. They’d check that I actually had enough in the account before letting me have any. End result? I simply could not overspend. I could only spend the cash I had, so I had to be very careful.
At the end of each month, I had a small amount of money left over, because I’d been forced to budget and think ahead. It wasn’t much each month, but it was more than the negative balance I had every month previously.
3. Budgeting does not require crazy restrictions. You get to decide how much money you spend to suit your needs and the needs of your budget. You can put however much money you want in each spending category.
Budgeting is not about simply limiting parts of your life. You’ll learn how to experience new opportunities in saving and spending money in order for you to have more fun.
4. Budgeting is simple and flexible. Budgeting can meet your needs no matter what they are as long as you’re willing to be flexible. Set money aside for savings and then let your budget be flexible in how you meet your other financial needs for the best results. Change your budget as your needs vary.
Once you get into the habit of budgeting, that frivolous spending that leaves you financially “overdrawn” becomes a thing of the past. You’ll enjoy the freedom it brings you when you find that you always have money on hand to spend on the things that are most important to you.
If budgeting is new to you you may care to sign up for our free budgeting report. You’ll see the link in the top right hand corner. Just click on the image of the budgeting report and you’ll be able to download your copy within moments, any time of day or night. And remember, it’s free – our gift to you.