In many households the word budget stings like a four letter word. But it’s not, it has six and has gotten an undeserved bad rap. If you are looking to start budgeting or for some inspiration to continue budgeting then read below. If you aren’t quite there yet, feel free to read on or maybe head on over to our splurge section.
So as an attorney and former financial advisor, I am going to make the case for budgeting. Hopefully a convincing one that you will decide should win over your splurge instinct most of the time.
Budgeting requires at a minimum tracking your income and expenses so that you can get an idea of where you are financially. The idea is what is coming in and what is going out. If there is more going out than coming in then you are going into debt. See other posts about debt to understand in detail why this is not a long-term viable solution. For more info on budgeting basics see those posts.
The idea behind budgeting is not to prevent you from spending $6 at Starbucks everyday or buying the new Coach bag that just came out. The idea is to be in control of your money. If I ask someone, “Do you want control of your money?” they generally answer, “YES!” If I ask, “Do you want to be on a budget?”, rarely am I met with such enthusiasm. So follow the steps below to gain control of your money.
One-Control Your Money
Changes your outlook! Yes those little voices in your head. Change them to say I am not on a budget. I am in control of my money. Guess what, being in control of your money rocks!
When you are in control of your money you don’t go into unnecessary debt. We all know probably too well that unnecessary debt sucks! Even necessary debt sucks but unnecessary debt sucks more. Those must have shoes you spent $200 for that are last year’s trend and have been pushed to the back of your closet. But the $200 is still on your credit card collecting interest and now you’ve paid $300 for them and climbing. Now that sucks! Not going into debt especially unnecessary debt rocks!
Three-Harmony in Relationships
Budgeting helps create harmony in your relationships. Really? Yes! You know how your husband and you argue after you splurge on items like the $200 shoes mentioned above? Well that is a thing of the past. You know how you are irritated that he eats lunch out everyday while you are home with the kids eating peanut butter and jelly. Argument vanquished. Why? Because you’ve already agreed where your money will go and you’ve got money set aside that each of you can spend where you please. (See post on the importance of individual money in a marriage). Arguments and unspoken resentment solved. You know budgeting rocks for relationships!
Four-Find Your Splurge Money
Budgeting is where you find your splurge money. You know the Michael Kors bag you’ve been eyeing or the new iPhone you really want well guess what through a budget they can be yours. A budget helps you find ways to redirect your money to things you really want. It may take some creativity and saving for a while but through budgeting the splurges you really desire can become a reality.
Five-Ready for Retirement
Budgeting Rocks if you want to actually stop working one day. To have money set aside for retirement through a budget gives you peace of mind and that is a priceless way that budgeting rocks!