Guest blog by Lionel Shipman, Shipman Consulting, a financial and life empowerment company
I have often wondered why budgeting seems to invoke tension in consumers. It is such a great tool in helping people and companies operating proficiently with money. However, it is often looked at as a tedious task for many people. Every day, companies throughout the world operate utilizing a variety of budgets for departments such as payroll, purchasing and marketing. If companies and organizations can operate successfully and benefit from using budgets, then surely consumers can do the same. And, consumers should do the same. They should take advantage of the concrete and clear message companies are sending – budgets are a proven and essential tool to successfully managing money and meeting goals.
What is a budget? A budget is a guide that tells you whether you are headed in the right direction, financially speaking. It is basically a summary of your income and expenses. It helps determine whether your household finances will reflect a profit or a loss. It is also a tool used to help you allocate or distribute your income. Budgeting helps you see and understand your current financial status and outlook (how much you make, how much you spend, how much you have, what you owe, where you are at and where you are headed). Along with setting goals, budgeting can help you improve your financial situation and outlook.
Daily, thousands of consumers worry about making their financial ends meet. Many have accumulated credit card debt and other debts, and they have very little saved for retirement or emergencies. For lots of people, when life happens and causes an unpleasant financial situation, they worry and become afraid and stagnant. It happens from time to time. And, it can happen to anyone. Instead of worrying, start taking charge of your finances right away. You can do something about it today. Begin budgeting. It is a solid place to start. Establishing and maintaining a budget can help you improve your financial situation and outlook. It can help you remain financially steady going forward.
Here are five reasons why budgeting works:
- A budget gives you control of your money, instead of your money controlling you.
- A budget tells you if you are living within your means.
- A budget can help you meet your financial goals.
- A budget frees up extra money so you can use it for things that are truly important to you.
- A budget helps you prepare for emergencies, unanticipated expenses, and opportunities.
Budgeting is not a one-time event in life. Budgeting is a life-time event. It should become a part of your life, for the rest of your life.