Budget. It’s a four-letter word to many people. We hate the
restriction, the deprivation, and tracking all the little details.
But personal finance experts continue to tell us we need a budget.
Don’t get me wrong. Budgets are very useful tools. I think everyone
should try to use one (or something like it) if they really want to
have control over their finances. But I wonder if we don’t go about
it the wrong way when we try to implement budgets.
For someone who’s never had a budget, the whole process can seem
daunting and mysterious. What’s the right way to budget? Why should
I even do it? How do I track all my expenses? While budgets are
quite simple (a list of income and expenses with goals), there are a
number of questions that can come up for the uninitiated. They find
some answers from people who seem confident and knowledgeable and away
they go. They make up their first budget and set high goals. Maybe
it looks like this:
| Take-Home Pay: | $2500 |
| Savings: | $500 |
| Giving: | $200 |
| Rent: | $1000 |
| Groceries: | $200 |
| Auto Insurance: | $100 |
| Gas: | $200 |
| Phone, Internet, & Cable: | $100 |
| Utilities: | $100 |
| Eating Out: | $50 |
| Personal Expenses: | $50 |
| Total Expenses: |
$2500 |
