Create a Budget
and Ways To Benefit From It
Budgeting is not the torture
mechanism we’ve been trained to think it is, but rather a powerful
method of gaining control, planning, communicating, and fulfilling
your dreams. At the very least, a budget will allow you to find
extra spending money in your paycheck every month! You can
actually get money by budgeting (unfortunately, most people think
of it as a way to deprive yourself).
So Why Budget?
A budget is the most fundamental and most effective financial
management tool available to anyone.
Yes, anyone – whether you are earning thousands of dollars a year,
or hundreds of thousands of dollars. It is extremely important to
know how much money you have to spend, and where you are spending
it. Yes, some of your "spending" might be for
investments, but there is an important distinction between
creating a personal budget and deciding where to invest your extra
income. A budget is the first and most important step towards
maximizing the power of your money.
What’s in it for you?
Just about everything. A carpenter would never start work on a new
house without a blueprint. An aerospace firm would never begin
construction on a new rocket booster without a detailed set of
design specifications. Yet many of us find ourselves in the
circumstance of getting out on our own and making, spending, and
investing money without a plan to guide us. Budgeting is about
planning. And planning is crucial to produce a desired result.
What is a budget?
A budget is a money plan. With it, you can organize and control
your financial resources, set and realize goals, and decide in
advance how your money will work for you. A budget can be as
simple as it is powerful. The basic idea behind budgeting is to
save money up front for both known and unknown expenses.
Benefits of Budgeting
1) Know what is going on:
Personal budgeting allows you to know exactly how much money you
have-even down to the penny, if you so desire. Furthermore, a
budget is a self-education tool that shows you how your funds are
allocated, how they are working for you, what your plans are for
them, and how far along you are toward reaching your goals.
"Knowledge is power," as the oft-quoted saying of George
Eliot goes, and knowing about your money is the first step toward
controlling it. That leads us to our next benefit: