I know some of you think budget is a bad word. I mean, why would someone take the time? What a drag! What’s the point? It’s not worth it, right?!?

Actually, it is worth it. According to Duke University’s personal finance web page, “planning and monitoring your budget will help you identify wasteful expenditures, adapt quickly as your financial situation changes, and achieve your financial goals.”  Following a budget can also keep you out of debt or help you work your way out of debt. Who doesn’t want to achieve their financial goals (like buying a home, saving for college, or retirement)? Who doesn’t want to be better positioned to make wise financial decisions?

What is a Budget?

So, what is it? A budget is an itemized summary of likely income and expenses for a given period (I recommend keeping a monthly one that covers a calendar year). Simply put, it’s a spending plan. It helps you determine whether you can grab that bite to eat after work or should head home for a bowl of soup.  It is typically created using a spreadsheet (I like Excel), and it provides a concrete, organized, and easily understood breakdown of how much money you have coming in and how much you have going out.  But more than that, it’s an invaluable tool to help you and your family prioritize your spending and manage your money—no matter how much or how little you have.

When you actually see the breakdown of your expenses, you may be surprised by what you find. Indeed, this process is essential to fully grasping how things can add up (we spent how much eating out last month?).  Creating a budget will decrease your stress levels because, with a budget, there are no surprises.  Unexpected car problems or medical bills?  That dream vacation you want to take for your anniversary?  With a budget, you don’t have to panic or wonder if you have the money—you already know.

Budgeting is wise planning. “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want” (Proverbs 21:5, New Revised Standard Version). Need to improve your financial situation? Do you wish you could save more? Be more generous? Reach that financial goal? Don’t wait any longer to start budgeting. You can do it! Budget is not a dirty word!

Finally, here are some more resources: