Section 2.1 Do You Need a Budget?
Yes. Yes you do.
Every part of our capitalist society is devoted to trying to get your to spend your money. Our society makes it really easy for you to buy products or services with little to no thought. One of the biggest reasons people go into debt or are unable to ever retire is because they overspend their paychecks.
And it’s really easy to overspend. Don’t have enough in your bank account for that manicure? Credit card. Need a flashier car? Payment plan. Need a bit of spending cash for the holidays? Cash advance. (These are not advice for these scenarios. Please don’t do them. They’re just examples of how easier it is the spend money you don’t have.) A budget can be a tool that can help teach you discipline and fiscal responsibility. A budget is essentially the backbone or core of financial well-being. It is the foundation upon which other financial skills will be built.
A budget will help track where your money goes. Setting a budget for the first time can be quite eye-opening. Most people find that they spend far more on certain things than they think. A budget will help you set and achieve STAR goals. By putting goals into your budget, you are better set for reaching them. A budget can help payoff your debts or help prevent falling into debt. Debt is expensive, and it generally isn’t good to fall into unmanageable debt.
Now, I’ll tell you the truth. I do not currently set a budget for myself. I used to, but after getting an intuitive sense of how much I can spend and save each paycheck, I can confidently go through each month without overspending and managing to have an emergency fund for unplanned expenses. This is not because I’m wealthy. I’m the lowest paid associate professor in the Massachusetts state college system. This is because I set a strict budget for myself that I followed until it became habit. When people say they can live comfortably, this scenario is usually what they mean. For most, it doesn’t happen overnight. It takes time.
