With so many people deep in credit card or loan debt and struggling to get out, a budget goes beyond being a helpful tool; it is a mandatory tool.
If you read any of the “Get out of Debt” books or “How to Handle Household Finances” articles, one of the first things the debt counselors and financial advisers suggest is creating a budget. Financial advisers suggest creating a budget for very valid reasons but people reject budgets because they think they are confining. In actuality, they are freeing.
What is a Budget?
A budget is your road map or a blueprint for reaching your destination. If you were planning a cross-country trip, would you get in your car and drive without charting your trip on a road map? Better yet, would you build your dream house from the ground up without architectural drawings? Think of the budget as the equivalent of a road map or architectural plans. It’s the month-by-month (or sometimes week-by-week) steps you must take to achieve your financial goals.
Keep in mind that budgets (unlike maps) are modifiable. Just like maps if you don’t follow it you won’t reach your destination as quickly and efficiently as you could. The most elaborate budget that details the household expenses to the last penny is great, but if no one follows it, it’s nothing more than a piece of scrap paper (or file to be deleted if created electronically).
As with taking a road trip, sometimes there is construction along the way. If one road is closed, you wouldn’t abandon your trip and go back home. You would find another route and continue towards your destination. A budget is no different. You may blow the budget on occasion, but that’s no reason to give up. Just get back on it and continue until you reach your destination.
A Budget is Not the Enemy
Budgets get a bad rap because of its limiting and confining connotation. People tend to think of budgets as they do a diet and that’s why both fail. A budget just like eating habits, are a way of life. If you don’t learn to live within a budget (spending less than you earn), you will be in debt for a very long time.
Once you understand the importance of setting up a budget, start http://www.tidbitsaboutmoney.com/2013/01/06/getting-out-of-debt-tracking-expenditures/ in order to set up the framework for a budget that works for you.
Paying Credit Card Debt Creatively: Sometimes you have to think out of the box to get out of debt.
Locating Legitimate Credit Counseling Services: For individuals who can’t seem to keep up with financial demands, maybe it’s time to locate a credit counseling service.