Budgeting

Why should we ever bother with doing a monthly budget? Let me point out some of the reasons.

The world economy is going down, particularly in those countries where the working class subsists on credit. This is not good news if you do not have anything stashed for the rainy days. Just think of what you will do if you lose your job all of a sudden and you have credit card bills to pay, plus the mortgage and the car and all the insurance policies that you've got.

Overspending is a status quo for a lot of people. It is not an exaggeration to say that most income earners are only three or so pay checks away from homelessness and starvation. Do you like that to happen to you? If not, start rebuilding your financial life by building your savings.

How?

By living within your means.

How do you get to live within your means?

By maintaining a monthly budget.

A monthly budget is your complete guide to attaining something that most people find it impossible - living within what you can afford. This is so important but often dismissed as a waste of time. Some of the more common arguments against monthly budgets are:

"It's only for organized people who just want everything recorded."

"It won't increase the amount that I get every month, anyway."

"I can change it anytime, anyway, so why bother?"

The trouble is, all these arguments have a grain of truth in them. A monthly budget does not have a soul apart from your commitment to translate it into action. In other words, a monthly budget is only an external manifestation of your will to keep your expenses within your income. In other words again, having a monthly budget means that you have a desire to keep your finances under control, and refusing to try keeping one means you could not care less if you are broke next month.

Monthly budget benefits: Why it makes sense

If you have a monthly budget which you keep to all the time, you get a better appreciation of your job's value. Admit it, there are times when you think that your job sucks. You drag yourself to the office, almost not wanting to leave your warm and cozy bed. But if you have a monthly budget and you know that most of the receivables will be coming from your dear old loyal job, you will get better inspired.

You will appreciate the fact that it keeps a roof over your head and puts food on your table. This appreciation contributes a lot to making you more positive about your work and the value of hard labor. It seems like I am stretching it too far but if you truly think of it, you know it's true.

If you are a control freak, a monthly budget is for you. By making one and keeping to it, you have total control of your finances (if you keep to it). Your monthly budget is like your handle on whatever money that comes your way. You can determine how it is spent absolutely down to the last dime.

By absolute control, I mean there is no overspending - so, no nasty surprises. Forgotten bills will be a thing of the past, as every item is checked and re-checked. Last but not least, there are no unplanned purchases, as every monthly budgeter should know that every expense is planned and properly budgeted for.

Having a monthly budget allows you to see if you have been overspending for a certain item at the expense of another. For example, if your gas expenses overshoot your food budget, you might want to consider commuting to work instead, as I believe that you deserve better to eat than your car to "drink". A monthly budget forces you to stare hard at your money skills and makes you face the hard truth and act on it.

Having trumpeted a few of the merits of maintaining a monthly budget, I must say that your monthly budgeting is effective only if you faithfully follow it. Remember, your aim is to keep control of your finances and make your savings grow. Its value is not in the exercise of making and planning a budget, but in acting on whatever you have planned. And by the way, did I mention that you need to put "Savings" as the first item in that budget?