Page 1

Budgeting Without Guilt Examining your Views about Budgeting There is no doubt that budgeting is integral if you want to meet your personal financial goals. For as long as you have a budget and stick to it, you know where to allocate your money, track your spending, and immediately identify where the holes are burning in your pocket and be able to do something about it before the damage threatens to overwhelm you. But creating a budget and sticking to it is not always that easy. Our attitude is one of the reasons why doing something so essential for our financial success is challenging. Many people equate budgeting with pinching pennies and deprivation. Because of this, they don’t observe their budgets for long. Those who haven’t budgeted before in their lives hear of this and are afraid to even begin. So before you start budgeting, review your feelings about it. If you hate the idea then it’s time for you to do a mind shift. You see, part of the success of sticking to a budget is believing wholeheartedly in it. If you don’t, you have already doomed it to failure. Even if you have not succeeded at budgeting before, this does not mean that you will fail again. Remember that this is a plan on how you will spend, save, and invest your money. It is not spending your money first and thinking later on where it went. When you make budgeting a regular part of your weekly or monthly routine, you will find it to be quite liberating. You will get to see your savings grow which will further fuel your desire to continue observing it. It may be difficult at first but you will soon find that you can’t do without a budget. But this has to start with a positive mental attitude. Reasons to Budget Once you are ready to embrace budgeting as essential to reaching your personal financial goals, you are one step closer to creating your budget. But first, let’s understand why you need to budget in the first place. Here are the reasons why creating a financial plan is an absolute must: 1. A budget puts you in control of your money. There is a reason why a budget is also called a spending plan. It allows you to plan what you spend in advance. Most of us handle money the other way around—we spend first and plan what’s left. This is the reason why we get into a lot of debt and depend on our credit cards for even the most basic necessities like food. The worst part of it is that most of the time, we

don’t think we have a debt problem until such time that the debt has ballooned too much that we can’t pay even the bare minimums on our credit cards required each month! When you have a budget, however, you empower yourself. You direct where your money goes. You control unnecessary spending without depriving yourself of anything. On the contrary, you are able to provide for your needs because your budget reflects what is truly important. A common example is eating out. Without a budget, you probably won’t mind having restaurant dinners three times a week. But if this costs you $30 for each meal then you’re spending $90 a week which translates to $360 a month. If you cooked your own meals at home, you wouldn’t even spend one-fourth of that amount! In fact, families allocate $300 to $400 for their food consumption each month—including that occasional restaurant treat. 2. A budget allows you to save for things that really matter. When you have a budget, you categorize where your money goes. There is an allocation for food, toiletries, utilities, and savings, just to name a few. Without a plan, you simply buy whatever it is you fancy. You see a scarf or a bag, you get it. You fancy pizza even if you just had dinner, you get it. While this may give you some short-term gratification, you won’t be able to get those that have lasting value—such as that dream house, that new car, or that grand trip to the Bahamas you have been planning for ages. 3. A budget reduces financial stress. When you follow a budget, you won’t find yourself in overwhelming debt. You won’t avoid the phone because you know it won’t be a debt collector on the other end of the line. You won’t worry about the electricity being cut off because you can pay your bills on time. You will have an emergency fund set up so even if something unexpected comes up—a job loss or sickness in the family—you won’t be put in a financial bind. 4. A budget secures you and your family’s future. This may seem so far-fetched now when you’re still in your late twenties or early thirties. But if you make it a habit of following a spending plan and putting money in savings and retirement accounts and other investments, you won’t have to worry that you will depend on your kids when you’re in the twilight years of your life. Moreover, you can even leave them a fortune before you pass on to the next life.

5. A budget prevents divorce. Okay, perhaps not totally. But did you know that most separations are triggered by money problems? Couples usually start arguing when there isn’t enough money to take care of the needs of the family. Talking about money matters with your husband or wife and making sure that you are on the same wavelength when it comes to allocating where your money goes ensures that you are operating as a team. When you don’t have to argue about finances, you have more energy to fix the other issues in your marriage.

Check out for more Information on Money Management Tips. Other related info you might be interested in: • • •

How to Dig Yourself Out of Credit Card Debt How to Deal with Damaged Credit or No Credit History Getting Financially Fit Before You Invest

Budgeting without guilt