You may call it a “spending plan” or a “financial guide.” Whatever term you use, personal budgeting is an important component of financial success and one that’s not difficult to implement.
Here are a few reminders:
1. Budgeting isn’t just for poor people or for times when money is tight or you are undergoing a major transition. It’s for everyone because it makes it easier to achieve financial goals of all shapes and sizes, wheth- er that goal is to avoid debt or to pay cash for a sports car.
2. Budgeting allows you to make long and short-term projections about your financial situation, prevent a crisis, get the most out of your money, plan for major life changes and enjoy peace of mind.
3. Budgeting systems — ranging from a simple notepad to online financial software to smartphone apps — are available for all needs and preferences.
4. Budgeting monthly, rather than by the paycheck, can help you learn to take a longer-term view of your finances.
5. Keep track of all your expenses, not just the big ones. It’s okay to buy a latte every day, but you should know how much you’re spending on them and that you’re spending within your means.
6. Getting a basic sense of your financial picture is an important component of Make sure you know how much you make after taxes and your tithe and how your required and optional expenses fit into that picture.
7. Being flexible with budget categories and allowing yourself affordable rewards prevents budgeting from being a drag and helps you stick with it.
8. A budget can help you meet short-term goals like a vacation, and long-term goals like saving for retirement.
9. Avoid budgeting mistakes like being so frugal it makes you miserable or letting a small mistake lead to bigger ones because you feel If you do mess up, remember that you’re only human and learn from the mistakes.
10. A budget should evolve as circumstances change. A budget made at 25 won’t work for you at 35. Income and expenses will change over time. For example, if you get a raise, you’ll want to adjust your budget to reflect how you want to spend or save the extra money.
A budget is a great tool not only for managing your money but for helping you sleep soundly at night. With a well-constructed and well-maintained budget, you’ll always know where your money is going, whether you’re on track to meet your financial goals and that you’ve planned to weather the storms that will arise from time to time.
Don Spencer is Kentucky Baptist Convention Church Financial Benefits Counselor.
Don Spencer