Simple Cents University: The Budget

That's right, I said it. Budget. I'll say it again. Budget. A word that strikes fear in the hearts of so many. Budget!! Here's the thing about budgeting, everyone has to do it. It doesn't matter how much water you have, if your cup has a hole in it, you'll die of thirst.

In my humble opinion, I believe there are three reasons why we resist subjecting ourselves to a budget. First, there is the fear factor. We are innately scared of taking responsibility of our actions. We just don't like the accountability. If we bury our head in the sand, then there won't be a problem. Right...

Secondly, for alot of folks, submitting your finances to a budget is admitting inadequacy. It's saying, out loud, I don't make enough money to satisfy my every urge. I can't buy everything I want. I am not Bill Gates.

Lastly, we live in a media driven world of extravagance. Lifestyles of the rich & famous. The bigger the better. Mo' money. Gold Teeth. I haven't seen anyone on TV wiping their butt with dollar bills yet, but it is coming. This I assure you. In alot of ways, a budget symbolizes modesty. It symbolizes planning, restraint, and discipline. Those things just aren't cool. But here in the real world, you must practice restraint. If you desire a peaceful lifestyle, with a spouse that believes in you, with kids that respect you, and with an employer that trusts you, you must have those characteristics. No one makes enough money to live like Jay-Z, Donald Trump, or Brad Pitt. Give it 10 years. They will all be broke and in rehab. Trust me...or ask Latrell Sprewell, Ed McMahon, & Evander Holyfield. But as for the rest of us. We have to budget. If you have never budgeted before, try it.

You only make so much money. If you spend less than that, you save money. If you spend more than that, you go into debt. And if you don't know where you stand, you are probably blowing more money than you realize.

There is no magic to the budget. At the first of the month take a piece of paper, put your monthly income on the top of the page, and list your planned expenses below. Spend the money you will have on paper. When you run out of money, you are done. As the month goes along, only spend what you have planned. If you run over on gas (for example), that is perfectly fine. But an overage on gas means an underage in another category. Because, after all, you only make so much money.

Budgeting can be done on paper, in excel, or through a host of software programs. I would recommend Mint. I use it and love it. It is free and very intuitive. As a company, they assign to three principles of personal finance:

1. Spend less than you earn
2. Make the money you have work for you
3. Be prepared for the unexpected

Sweet and simple. I like it. Mint has plenty of features. It monitors your credit cards, bank accounts, and investments. Mint allows you to set target budget goals for every category and provides an overview of those goals throughout the month. If you are a tech-savvy youngster starting up a budget, I highly recommend it.

All things aside, we challenge you to get on a budget - no matter what your income is. Live below your means and make your money go further.

Budget!!!