Properly used, Budgets get good results
In school, kids used to learn how to keep a checkbook and a bank book. They would also keep track of costs in a ledger. Then they would learn to write checks.
Then a lot of people would graduate from school and for some reason not be able to able to follow a budget. There are more problems in the real world than in school. There is the daily life of going to work 9-5 and cleaning the house, shopping for groceries and going out on the weekend. For many people, budgeting seemed to get lost in the daily grind.
When people start to work they actually prefer to think of the things they can buy with their new-found funds. They also want to test out their new credit cards. They don't want to start up a budget right away. They want to have fun shopping and enjoying what the money can get them. Now that's not to say that all people do this. There are several ways that people approach the new funds they receive.
- Many people don’t think they make enough to try budgeting. They just want to have enough in the checking account to cover bills and hopefully there will be a little bit of savings building up to get something nice now and then. Budgeting will come when they find the need.
- The need to go on a holiday, get a car and furnish their new home is more important.
- Budgets are boring and eat up time so some people simply don't budget with a real plan, they just wing it.
Budgets are meant to help control your funds so you don't get into debt and you can enjoy savings down the line and have emergency funds in case of, well, emergencies. The budget game is to make sure that funds are available in a timely manner for the things that life throws at us.
A budget can also create a great feeling of security. Financial security that is. That can also translate into a feeling of family security. A family that budgets properly definitely feels better and works better. A family that budgets poorly, usually feels the stress of poor money management. It is far better to know, understand and see your finances grow rather than always struggling to pay bills and use your hard-earned money to pay off bad debt. A family’s success or failure may rest in the way the budget is handled.
Just like in school we were taught the basics of budgeting, adults should spend the time to learn and understand the financial world to some degree and make a concerted effort to run a budget that is fiscally responsible.
Using a budget can also help figure out why savings are not adding up or why debt is piling up. It amazes lots of people even today, where their funds are going and why they are getting ahead or getting behind. Budgets tell a story and that story can lead to corrective actions if needed or else they can lead to financial enjoyment.
Family's can use the old fashioned envelope or jar system to allocate funds. This way when the funds run out they run out. Family's can also use allowances. That way family members can run their own mini-budgets. Budgets also work best when the family members pay attention and understand the budget. The various parts of the budget should also be properly managed. There will likely be one member of the family that runs the monthly budget but other members should also pay attention to accounts to make sure that things don't go astray. Bills need to be paid and debt shouldn't be allowed to grow. It is crucial to make sure that all aspects of budgets are run and watched properly.
It is always fun to watch savings accumulate and even more fun to use the funds for their intended purpose. Saving for Christmas gifts, going on a vacation, buying a new car, paying off an emergency, there is gratification that the budget did its magic.
- Learn good financial methods
- Practice Wise Shopping
- Save for your wish list
- Create Emergency and Retirement savings