To many people the word budget implies something constraining
and negative. But a budget is really nothing more than a
spending plan. By planning how and when you will spend your
money, you are really just living within a budget.
A budget is an essential element in money management. If you do
not know where and when money is going to be spent, there is
simply no way to control it. If you are not "made of money", and
who among us is, then control measures must be in place to
maximize the money you do have.
Years ago when I was first married, my husband sat me down and
wanted to discuss the "budget". I cringed at those words. I
didn't want to be told how or when I was going to spend money.
So he changed his tactic and told me that we needed to work on
our spending plan. Now, that got my attention. I liked the idea
of knowing that we were going to be doing something about
spending! Just changing the words allowed me to be more open to
the idea.
In developing your spending plan, you must first keep careful
records of what and where you are currently spending your money.
This can be as simple as just writing down items in a notebook
or as complex as buying some financial software to keep track of
purchases. You may even consider keeping a folder or envelope in
the car or in your purse where you can keep receipts. One of the
most important elements though is recording every purchase. Keep
all those receipts and write down every time you spend money,
whether it is a cash purchase, by check, credit card, automatic
payment, or withdrawal from the ATM. Later, you can put these
purchases into categories and identity your spending pattern.
How much of your money goes to food, eating out, gas, clothing,
housing, car payments, etc. It will take some time to train
yourself to do this, but once you establish this habit, it will
go a long way to helping you really control your spending. Once
you have identified your current spending, then you are ready to
make a plan for future spending.
Developing a spending plan is one step to gaining control of
your money and making the most of what you have.
About the author:
For resources and information on a wide variety of money
management topics, visit
www.NotMadeOfMoney.com.
