Have You Started Budgeting Yet?

One of the earliest posts we wrote on this blog concerned budgeting. We started with the topic The Basics Of Budgeting as a baseline on how to get started. It’s still a pretty big deal to us, as it should be for you, which is why we’re revisiting the topic again.


Our bet, if you did start back then, is threefold:

* your bills are under control

* you have more money in your checking or savings account

* you have more peace of mind because you’re not as worried about paying your bills

Budgeting works for everyone if they have an income. It works better if you have more money coming in than you thought you did because you end up with more choices for how you want to handle the extra money.

Many people will see the extra money and spend indiscriminately; that’s their choice. Other people will set financial goals where they’ll either try to increase their wealth by investing or just watching it grow in their checking account, feeling comfortable in knowing that they can access it whenever and however they wish.

We have the account of someone we know who helps people set up budgets. When he met with one client she literally was 43 cents in the hole; things don’t start much worse than that.

They went through the process of seeing where she stood realistically. It turned out that, though it wasn’t much based on what she owed, she actually came out ahead. He put her on a pretty restrictive budget, which had to include buying food for her pet, and set up one goal; getting one credit card paid off fairly quickly to start reducing her debt and help her cash grow.

Things worked better than expected that first year, mainly because the client now knew where she stood. She not only stuck to the budget but got a part time job so she could have more spending money to supplement the strict budget. She stopped using the credit cards, paid the bills when recommended, and after the first year she ended up with around $900 in the bank and that particular credit card paid off.

Over the course of 10 years many other changes have taken place. She now sits with nearly $10,000 in her checking account, has a CD and a money market account, was able to buy a new car and put some extra money down on it to reduce the payments and actually have the cash to take two vacations out of town.

The idea of a budget isn’t to restrict you; it’s to help you figure things out and make managing your money easier. Take a look at the first link above regarding budgeting and think about starting today if you haven’t already done so. Trust us, it’s for your own good.