Budgeting

It’s important to understand how much money you are earning, saving, and spending. Knowing these numbers helps you reach your financial goals, stay out of debt, and make retirement a reality. Having a plan helps you be intentional with your money and make better choices.

Whether you are 25 or 75, spending less than you make is essential for financial success. Budgeting helps you build good habits that will be with you for your entire life.

People often look for a silver bullet for their budgeting problems. There is not a one-size-fits-all approach. There are many different successful ways to budget, ranging from low tech to high tech methods. The most important thing is finding a system that helps you (and your spouse) be accountable and intentional in reaching your goals. See Plan Your Spending in the Core Financial Principles book.

Budgeting is a struggle for many people, but that difficulty shouldn’t be a reason to give up. Keep at it! Being consistent is important. Developing healthy budgeting habits takes practice and is essential to success. If you need extra support, visit with a financial planner who can help you progress past your pain points.

There are many rules of thumb regarding how much you should spend in various categories. Budgeting is personal and varies widely. When you decide what’s most important to you, it will be clear how much is left to spend on other things. Putting your needs first can help you see how much is left for your wants. Going into credit card debt for wants you can’t afford is damaging to your financial health. To determine your spending priorities, try the Financial Needs vs. Financial Wants exercise.