How to Budget

Say the word ‘budget’ to a group of people and watch the look of horror and despair come across their faces. Feet shuffle, arms become folded across chests and an uncomfortable feeling begins to permeate the air.

It’s strange, most people believe they should have a budget. Yet they don’t. Some people will launch into reasons why it didn’t work for them, which is their excuse for not having one. Others will stammer and blush, and listen half-heartedly, their eyes rolling around the room frantically trying to find another topic of conversation or somebody else they can go and talk to.

The Macquarie Dictionary defines budget as “to plan allotment of funds or time”. The definition doesn’t need any explanation. So if it’s that easy to understand, why is it a word that instills fear into most people? Is it because we think we might have to miss out on something?

We live in a society today where we’re told that we can ‘have it all’. We’re expected to keep up with the latest trends in fashion, housing, cars, technology and lifestyles. Sounds wonderful … but how do we pay for it?

Advertising points us into a direction where we can have everything we want and with easy access to credit, we don’t have to pay for anything till later. But how much later is later? Is it a year? Is it a decade? Or is it a lifetime?

Yes, of course we can have it all… if we can afford to pay for it! It’s quite simple really… if we have a budget we can allocate some money for ‘savings’ and then we can actually buy, with cash, the things that we want. How good would that feel?

It’s time we changed our thinking. We need to realize that Budget is not a dirty word. A budget is a plan that will allow us to reduce some of the stress in our lives.

Published with permission from Budget Bitch Pty Ltd  http://www.budgetbitch.com.au