The Benefits of a Budget and How to Get Started

It’s Dangerous To Go Alone… Take This!

It might not be a magical sword; it may not be a small creature with elemental abilities that sleeps in a shrinking ball… But this is your best item when starting at "Financial Level 1".

 A budget. 

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• A budget will give you the bare-bones story of where your money should go, and how much should be left after you pay those pesky bills. 

• It can be as simple as “Paycheck - Bills = Leftover Cash”. Or it can have immense detail and look like a company’s annual financial report.  

• A budget will help maintain control of your money, which can reduce stress. It will also help you reach your financial goals. 

• A budget can’t fix all your financial issues, such as an income shortage.

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Why budget?  

“I was paid a week ago, where did all my money go? Guess I’ll just have to use my savings.”  

Unfortunately, I’ve heard that  phrase from many people. Whether it was a 20-year-old, a 45-year-old, or a 25-year-old Me.  

      Budgeting can be scary, and downright intimidating. I've avoided my budget in the past because something had changed (income or a new bill), and I was afraid of seeing my savings go down. It may come as no surprise, but avoiding my budget didn't help in any way. I had to use money from my savings because I overspent my paycheck.

      Trying to budget after payday is tough. You may find that you’ve already spent a lot of your “fun money”. I find it easier to have a budget projection done the weekend before payday. This way only minor adjustments are necessary. This helps put the money where it needs to go, as opposed to trying to play catch up later. 

What are the benefits to budgeting? 

It's easier to save for a special occasion when you budget. Whether it’s a vacation, a car, or even a down payment on a home. If you haven’t done a budget, and you're saving $100 per paycheck with plenty left over, you might be able to save twice that. Maybe you can save $200. Now you can save more money for your road-trip, and still go out with friends each week.

Take away your stress and replace it with peace of mind with just 5 minutes of budgeting.

 Is this something I’ll have to do for the rest of my life? 

Yes. Well actually, no. But probably yes. 

If income is good and bills are minimal, you probably don’t have to budget every paycheck for the rest of your life. But I would still advise that you revisit your budget occasionally. Especially if you're paid hoursly wages, or if you have a new bill. 

      Consider your budget a “living document”. The items that would go in your budget are constantly changing. A new car brings car insurance. A new job may have a greater commute, which demands more gas money. Starting a new diet will likely change your grocery bill. Things change, and that’s ok. We just want to to plan for it, or at least roll with the punches.  

Anything else...?

      Because you asked... Once again, your budget can be as simple or complicated as you want. The internet and mobile app stores have a vast collections of templates and cell phone apps. I recommend starting with an Excel or Google Sheets document if you consider yourself a do-it-yourselfer; stick with the basics. If you're a "techy", there are loads of free apps you can download to start budgeting.