Budget Isn't a Bad Word

When you hear the word “budget”, what does it mean do you? If you’re
like most people, you probably think of it as an unpleasant activity
that means you have to financially deprive yourself. This couldn’t be
further from the truth, yet this is the typical reason that most
budgets fail.

Think of it as Managing Money

Your budget isn’t created to make your life miserable; it is simply
a guide to help you manage your money. We all have income, and we all
have expenses, and without proper allocation of the money something may
fall short. The goal when creating a budget is to lay the foundation
for allocating what portion of your income is required to cover each
expense.

A Budget is Like a Recipe

If you are going to bake a cake from scratch, you’ll probably want
to use a recipe to ensure it bakes properly and tastes delicious. A
recipe is simply a list of required ingredients along with the
quantity, followed by instructions on how to add them together. If the
recipe is followed properly, you will be rewarded with a tasty final
product.

Your personal finances aren’t much different. Your income is the sum
of ingredients, and your expenses are the quantities to use, while the
budget tells you how to put it all together. With a cake recipe, if
you’re short an egg or put in too much flower, the cake will not taste
right or even bake properly at all. The same goes for your finances. If
you spend too much money on one expense it may make you short on
another expense, which would yield results that are less than expected.

Take Control of Your Money

When you create a budget, you take control of your money so that it
doesn’t control you. Don’t let the negative image of a budget making
your life miserable keep you from taking control. You can still enjoy
yourself and even include discretionary or “fun money” in your budget.
The goal is to simply create an outline for your money that puts you in
control so that it doesn’t control you.