"This is your money. Stop wondering where it went and start telling it where to go."
Dave Ramsey The Total Money Makeover (paid link)
To many, the idea of a budget seems restrictive, boring, and old fashioned. But believe it or not, "budget" is not a dirty word, and a budget is not an outdated idea, but a useful tool for us today.
The process of making a budget helps us focus on our needs, of course, but it also lets us find a way to afford our desires. A budget doesn't tell us what we can't spend; it's simply a plan for how we choose to use our money.
Many of us are near-sighted about money.
We pay our bills every month, and manage to afford clothes, restaurant meals, salon appointments, and our morning lattes, but we're always caught short by our annual auto registration fees or property taxes. Lots of our entertainment requires a credit card, as does any true emergency. We don't save much for retirement, even though it's inevitable that someday we will need or want to stop working. And we may dream about something we really want to have or do, but we have no plans for how we might afford it, and we fritter our money away on things that don't really matter to us.
We work too hard to wonder where all our money went. We shouldn't have to deal with thoughts like Why can't I pay my bills? or Why am I so broke all the time? And even if we feel pretty comfortable about our financial situation, a budget can maximize our options for achieving our most meaningful and valuable goals.
A budget gives us control over where our money is going.
It lets us pay for our day-to-day expenses, and helps us prepare for quarterly or once-a-year expenses too. It also lets us plan for those unplanned expenses, like an emergency room visit or refrigerator repair. And it lets us have fun without resorting to a credit card.
The beauty of a budget is that it helps us pay attention and become intentional about how we use our resources. A budget lets us make sure that every dollar we earn has a purpose, that we are meeting our needs and using our earnings to satisfy our deepest priorities.
My budget isn't going to look like yours, and your budget isn't going to look exactly like anyone else's. We can tailor our budgets to meet our specific requirements.
You can create your budget on a piece of paper or with an Excel spreadsheet or an app. Whichever way you decide, you'll follow the same steps to create a zero-based budget, one in which your monthly income minus your expenses equals zero. A zero-based budget gives you a plan for every dollar.
Photo by Michael Longmire on Unsplash