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Most people consider a budget a torture device, but it doesn't have to be that way. Done right, a budget is an awesome tool for setting and meeting goals that can help you figure out how to pay bills effectively. Those goals will be different for everyone. Whether your goal is to get out of debt once and for all or take a trip to a tropical island, a budget will get you there.
A budget helps you keep track of how much money you have coming into your household and how much your expenses are. It helps you spot trouble areas and plan ahead for them so you don't end up having to run up big credit card bills. You pay most of your bills, such as your credit cards, utility, housing, and grocery bills, each month. Some bills, like your car insurance, may only be due twice a year. In order to avoid getting caught short in the months your car insurance is due, a budget helps you figure out how much you need to put aside each month so you have the full amount when you need it. Also, a good budget actually includes amounts for fun! In fact, budgets that ignore things like movie rentals, eating out, and vacations, are not realistic. No one can stick to a budget that doesn't allow for rewards—within reason.
|Sheri Ann Richerson|