BUILDING YOUR FINANCIAL PYRAMID
Budgeting lies at the foundation for building a winning financial plan. It doesn’t matter if you’re living paycheck to paycheck or earning six-figures a year, you need to know where your money is going if you want to have a handle on your finances. Budgeting isn’t about cutting out all the fun in your life. Budgeting is about developing a winning financial plan, understanding how much money you have, where it goes, and then planning how to best allocate those funds.
Do you know why a budget is so important? It may seem like creating a budget is just a tedious task, especially if you feel that you already have your finances under control. However, you might be surprised at just how valuable a budget can be. A good budget can help keep your spending on track and even uncover some hidden cash flow problems that might free up even more money to put towards other financial goals.
The primary reason for creating a budget is to help keep your finances under control. A budget tracks how much money you’re spending and where it is going. If you have a budget that tells
you exactly how much you have to spend, why is it so easy to overspend? There are numerous reasons why we overspend, such as, not doing research on the cost of an item or impulse buying. When you discover the cause of overspending, you can develop a prevention plan to keep your budget on track.
When you begin to stray from your budget it’s usually because of spending too much money somewhere. But if you have a budget that tells you exactly how much you’re supposed to spend, why is it so easy to overspend? There are a number of reasons we overspend, so when you understand what causes over-spending, you can help put a stop to it and keep your budget on track.
The hardest part of creating you’re winning budget is actually beginning the process of creating one! But don’t worry; the Personal Financial Management Program provides a monthly Basic Budgeting Workshop to provide participants with the steps necessary to create a winning budget.
Budgeting Tip from LouAnn
Regardless of whether you are using a credit card or a debit card, we can make a purchase in a matter of seconds. Unfortunately, this convenience comes at a cost. Using plastic, we can easily lose track of how much was actually spent. If you’re not careful; 2 dollars here, 10 dollars there, can add up quickly and bust your budget! One easy way to keep your daily spending un-der your control is to use cash instead of your credit or debit cards. It might not be as fast, but it will help you visualize and realize how much money you’re actually spending.
Personal Financial Manager: LouAnn Witmer 466-5837