The other day I was talking with my mother-in-law about the dreaded budgeting topic. She said she didn't bother budgeting because she already knows that she spends more money than she has. So apparently, if you're operating in the red then budgeting serves no purpose.
A mindset like this terribly prevalent. I suppose that's a valid concern. Why would you budget when there isn't enough money? Read further to find out exactly why.
Even if you have more bills than money available to pay them, the exercise of thoughtfully looking at what you have on hand and deciding BEFOREHAND what you will do with it is extremely important. Instead of throwing all efforts to the wind, simply look at your checking account balance and assign every one of those dollars a job. Give each dollar a purpose: mortgage, groceries, entertainment, etc. This conscientious decision making is key.
Now it may very well be that you end up with more obligations than money, and the money simply runs out. That does not mean the exercise didn't produce positive results. Simply going through the process made you prioritize, so you know that your money is doing the most you could have it be doing at that time. That will be key in learning how to budget.
Your second task is to write down every time you spend any money whatsoever. Know that even if you're spending well into the red zone, writing down what you spend will cut your losses wherever ossible. The total damage done to your bottom line will be significantly reduced if you can manage to simply write down what you spend.
Manually recording what you spend helps reinforce awareness, and reconnects you psychologically back to your money. In this day and age, marketers, banks, and card processors want us to spend and spend without regard for our personal financial situation. This is no way to budget or manage your money! The exercise of recording your spending will make you (painfully) aware of where you should cut back.
So remember, looking toward the future and then writing down what's happening currently will help you budget in any circumstance. You'll keep the pain to a minimum and will buy yourself more time to execute a longer-term plan to get you operating in the black on a consistent basis. - 15224
A mindset like this terribly prevalent. I suppose that's a valid concern. Why would you budget when there isn't enough money? Read further to find out exactly why.
Even if you have more bills than money available to pay them, the exercise of thoughtfully looking at what you have on hand and deciding BEFOREHAND what you will do with it is extremely important. Instead of throwing all efforts to the wind, simply look at your checking account balance and assign every one of those dollars a job. Give each dollar a purpose: mortgage, groceries, entertainment, etc. This conscientious decision making is key.
Now it may very well be that you end up with more obligations than money, and the money simply runs out. That does not mean the exercise didn't produce positive results. Simply going through the process made you prioritize, so you know that your money is doing the most you could have it be doing at that time. That will be key in learning how to budget.
Your second task is to write down every time you spend any money whatsoever. Know that even if you're spending well into the red zone, writing down what you spend will cut your losses wherever ossible. The total damage done to your bottom line will be significantly reduced if you can manage to simply write down what you spend.
Manually recording what you spend helps reinforce awareness, and reconnects you psychologically back to your money. In this day and age, marketers, banks, and card processors want us to spend and spend without regard for our personal financial situation. This is no way to budget or manage your money! The exercise of recording your spending will make you (painfully) aware of where you should cut back.
So remember, looking toward the future and then writing down what's happening currently will help you budget in any circumstance. You'll keep the pain to a minimum and will buy yourself more time to execute a longer-term plan to get you operating in the black on a consistent basis. - 15224
About the Author:
Your financial success is largely determined by your budget. Jesse Mecham's free budgeting course will outline exactly how to budget so you'll be on the path toward financial peace and debt freedom.
