Why Should I Budget?
– You Have Limited Income: Virtually everyone has limited or fixed income. Without budgeting you are being controlled by your environment. If you have a plan, you are more in control of your money. Without a budget, you may not really know you are spending more money than you are earning.
– So That You Know Your Limits: Knowing what your monthly expenses are projected to be and what they actually are will help you keep track of how much money you have left over for future goals and needs.
– You Have Unlimited Demands: There is an endless demand on your finances. Our commercial capitalistic society is constantly calling out for you to buy. If you have minor children, the demands are greatly increased by the things that they want, the activities they are in, and the schools they attend.
– You Want Freedom Not Bondage: Budgeting seems to be restrictive to some people. The reality is that we have to make choices between what we want at the moment and our regular bills and goals for the future. However, there is freedom in knowing what your limits are. Many people find this liberating, because it creates the opportunities to grow and mature.
– You Have Future Goals: If you are sacrificing today, it helps to know what you are saving for in the future. Obtain a financial plan so that you will know what your goals are and for what you are saving.
– You Want to be More Aware of Where Money is Going: If you do not have a budget, you may have no idea where your money is going. Knowing where you money is going will help you identify if you are spending too much money in specific areas.
– You Want Less Stress: Spending without a plan and a budget increases your stress because you do not have a well thought out plan for paying your bills and you may spend more money for fun than you can afford. Planning and budgeting will give you the peace of mind that you are on the right track.
Contract with Yourself (and between Spouse)
Budgeting is very hard for many people; therefore, it helps to have a contract with yourself. If you are married, this agreement should include your spouse. If you work together, you will usually accomplish more than you could on your own.
I hereby resolve to:
1. Start a budget, and pay attention to it weekly and monthly
2. Not spend more money than I make
3. Be in financial partnership with my spouse with no secrets between us
4. Not borrow to purchase items that depreciate in value
5. Not let my emotions make me purchase anything, including gifts
6. Not purchase something over budget unless it was unavoidable
7. Not purchase anything that I don’t really need, no matter how good the sale is
8. Not purchase something to keep up with the Joneses
9. Not apply for any new credit cards, unless lowering interest rates
10. Pay off all credit cards monthly (I will work toward paying them off)
11. Not spend money on fun things unless I have paid my monthly bills
12. My spouse and I will both be the “fun police”
13. Include children in the budgeting exercise to teach restraint
14. Not obtain high maintenance items like a pet or hobby if I can’t afford the expenses.
15. Not buy something that costs over $50 without consulting each other and the budget
Cash Flow Management Checklist
In addition to having good budgetary habits, it also helps to take advantage of money-saving measures. The following are many of the things you can do to help you save thousands of dollars per year.
