When the prize money is just not enough…
Basic budgeting is a very fundamental process. However, putting it into practice can prove difficult in this world of aspirations for increasing amounts of often costly material things. You work hard for your money, so you need to play hard, right? The answer is yes, but you can also do this on a budget, once you know how.
“A budget is telling your money where to go instead of wondering where it went” – John Maxwell
- Everyone has different needs regarding a budget; these needs may change over time, so every budget is specific to that person’s priorities and lifestyle.
- Keeping a budget is a challenge, yet it has to be sustainable. If you “fall off” your budget, you have to get back on. It involves discipline, determination, motivation, sacrifices, and restrictions.
- It’s a lifestyle change, not a quick fix, but it has many advantages when you succeed.
- Fear or excuses (like lack of time/motivation) often prevent the implementation of a budget.
Despite this, there are many rewards to keeping a budget:
- Peace of mind and security
- Control resulting in stress relief
- Increased opportunities/choices
- Better living environment
- Less arguments over finances
- Ability to act as a role model among children, family, and friends
- Creation of an emergency savings fund (3-6 months of bills)
- Opportunity to pursue personal goals, including hobbies and travel
- Ability to make extra mortgage payments
- Security of setting up and funding a retirement fund—401k, IRA, stock market
- Investment and wealth accumulation opportunities
- Freedom to support outreach/charity work/sponsorships
- Choice to fund college attendance for children or self
Tips to get started:
- Spend less than you earn (no loans, credit cards)
- Aim to get out and stay out of debt (opportunity to build wealth)
- Be prepared to make changes
- Work as a team with your spouse/partner
- Prioritize wants versus needs
- Assess income and NECESSARY expenditures
- Cut back on wants as opposed to needs
- Allocate dollars to each category of needs
- Include an emergency savings fund
- Include FUN money for each person
- Repeat every month
Visit the Modern Gladiator financial arena next month to learn how to decipher between a want and a need, as well as to learn some basic methods of budgeting.
About the Author: Linda Hicks
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