Balance and Moderation on Money
According to an article online, 40% of Americans do not have a budget. Some individuals may marvel at this percentage and wonder how in the world can people make it without a budget? While others may shrug and say, what is the point? I live from paycheck to paycheck, always trying to make ends meet. What is the point of keeping a budget?
My focus is to address those who don’t have a budget. Or, the ones who keep somewhat of a budget in their minds, but never write down amounts coming in or going out.
What is a budget? Basically, a budget is a plan to decide how money is allocated based how much money is coming in. It is a plan, your plan concerning your money. It can be as simple as witting your assets and deficits in a spiral notebook, creating an Excel spreadsheet, or using an online budget plan. The point is to write down, keep track, and review your expenses on a regular basis. In can be weekly, biweekly or monthly. Budgets reflect balance, the ability to stay centered when spending is concerned. To be able to acknowledge limits, deficits and surpluses and adjust accordingly. To maintain a budget is to avoid extreme behaviors in spending, not to spend too much or pay too little, that’s moderation.
Why is a budget important? It can determine:
• What’s coming in and what’s going out
• If you are living above your means
• If you are not making enough
• If you are overspending
• If you are not allocating funds properly
• Ways to save
• When to make large purchases, i.e., cars, homes
• How vacations can be paid
• How to get out of debt and stay out of debt
Bad or no budgeting occurs when individuals treat themselves, family and others before paying bills. It is the, I deserve it mindset. They feel they work all week or for 2 weeks and now they feel they deserve to go to Happy Hour on Friday. They deserve to go out to dinner on Saturday. They deserve to buy something at the One Sale at Macy’s on Sunday. But on Monday, reality hits. There is not enough money left to pay rent, utilities, or other expenses. In their mind, they thought they had enough to do these things. Either they overspent, miscalculated or they are living beyond their means.
Slowly, these individuals find themselves sinking into a financial hole. Bills accumulate and payments are behind. Which can lead to apartment evictions, repossessed cars and garnished paychecks.
Budgeting skills are taught, through parents, schools, or other means. To maintain a budget is a choice. No one can force budgeting skills upon you. If you find yourself mystified at the end of a pay period as to where your money has gone, take a few minutes, write down your income and subtract all your expenses and allow your mystification to be resolved. Many people will blame the amount of income coming, that it is not enough. That may be the case. Then it is decision making time. You may need to get a second income or get a job making more money. Sounds simple, it’s not. But, a budget can help you see these revelations more clearly.
However, the way you spend your income may be an issue as well. If you are making just enough to pay bills, but find yourself overspending in areas that can be controlled, then the problem is not the income, it is your allocation techniques.
One of the key concepts to have when formulating a budget is honesty. You must be honest with how you spend. You must be willing and ready to do better. If these concepts are not adopted you will continue to find yourself in a financial debacle.
The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs 22:7King James Version (KJV)
Provided below is a simple good budget. This is a monthly salary of $2000. 00 after taxes.
Rent $500
Electricity $100
Utilities $40
Cell phone $70
Groceries $100
Gas for Car $100
Car Payment $200
Entertainment $100
Miscellaneous $100
Savings $100
Total $1410 $2000. 00-$1410= $590.00 left
The $590.00 allows you to identify areas you can increase. You may be able to get a better apartment or car, because you have the money to increase payments. You may be able to save more to eventually have a down payment on a home or other large purchase or save for a vacation. You have extra, at the end, of the month, to apply to other areas.
Remember, a budget is designed for you and your family. If you eat out more and cook less, increase your entertainment portions and decrease your groceries. What is the point of buying groceries that is rarely used when you lean more on take out? Or, in your budget, allow an amount for eating out. Of course, this will decrease the amount at the end of the month, but you were honest with yourself to know that eating out is a given.
Another point to address, some items on your budget may vary from month to month, allowances have to be made. Electricity bills fall under that category. However, you may be able to have some control. During the winter, does your home need to be a furnace while you walk around in shorts. Or, during the summer, does your home need to at a subzero temperature with windows and doors opened, children running in and out of the house? Adjust thermostats to save money. Most electric companies will provide you with ways to save. Adjust your way of living, It can save money.
This budget below needs adjusting, a case of bad budgeting. This is a monthly salary of $2000. 00, after taxes.
Rent $800
Car Payment $600
Entertainment $300
Gas for Car $200
Cell phone $150
Electricity $100
Utilities $40
Groceries $100
Miscellaneous 0
Savings 0
Total $2290 there is a deficit of -$290.
The budget has a deficit of $290, indicating you are in a hole from the start. And, there is no money left for any miscellaneous items that may occur or any portions for savings. This person is living above their means. Unfortunately, this is the way many people live.
Let’s investigate more closely. Remember, just because you qualified for the luxury car and the luxury apartment in the beginning, does not mean you can afford them when the monthly payments begin to flow in. If you had a budget, before seeking these pricey items, you would have known you couldn’t afford to pay $800 for rent and a $600 car note. With this valuable piece of knowledge, maybe you could have gotten a more affordable car or apartment. Maybe you could have invested in one of items, for example, the car, but rented an apartment more suitable for your budget, or vice versa.
The entertainment fund is too high. Eating out, going to the movies, renting games and videos, Happy Hours, Sunday brunches and any other forms of entertainment are fun and are needed to maintain a balanced healthy lifestyle. Everyone needs to decompress and blow off steam. However, your budget does not allow you to do all of the things, all of the time. Sometimes, you may need to say no. Discipline needs to be activated. It’s difficult because the I deserve it mindset comes into play. Thinking you are entitled to do whatever you what, it’s your money, you worked for it. In your eyes, this may be true, however you and your family deserve to live a balanced mental and emotional life, not constantly worrying about electricity being cut off, utilities being shut down, being evicted from apartments, or seeing the family car repossessed.
The two budgets listed above may be an over or under dramatization of everyday incomes and spending. The key point to focus on is the need for a budget in life. It keeps your money balanced and your spending in moderation
If you find yourself, week after week, month after month; year after year; always in a state of financial ruins and truly deserve to turn around. Here are some simple tips:
• Stop Spending. When you have reached the point that your spending behaviors is out of control. Stop the madness. Stop spending so you can identify where you are and where you are going.
• Go to God. He can give you the strength and courage to turn your situation around. Pray for His wisdom and guidance
• Obey and Listen. Whatever God instructs you to do. Do it. It will always be for the best. God will never lead you down a road of destruction. People are stubborn, strong willed and prideful. These are elements that must be broken to get out of your current situation. Some decisions may be difficult in the beginning, but worth it in the end.
• Seek knowledgeable people to assist you. There are people around you that have been in your situation and got out of it. God will send you the people to consult for financial guidance.
• Be disciplined. Train yourself to develop new healthy habits and discard unhealthy ones. Learn new things to do without a pricey price tag. Look for way to save. And, obtain the determination to stick with your plan when others advises against it, or entices you to do otherwise.
• Pay bills first. Bills come first. Entertainment and extracurricular activities should come after the bills are accounted for.
• Start a savings account. Take $5 or $10 a pay period and put it aside. Don’t dip into this fund or spend it. Many people will say this cannot be done, but if you shave off here and cut corners there, you will be surprised what you can save in a few months.
Everyone desires to have more money. But if you can’t take of the money you have, what is the point of receiving more. Start your financial planning today. See prosperity tomorrow.
Without counsel purposes are disappointed: but in the multitude of counsellors they are established. Proverbs 15:22King James Version (KJV)