This is a guest post from Kevin Watts who runs his own blog, Graduating from Debt. Kevin is an extremely talented writer and if you haven’t read any of his articles, you owe it to yourself to visit his blog.
You are no doubt familiar with the saying “more month than money” and probably relate to it only too well. The seemingly never ending challenge to stay one step ahead of the debt collectors is a stress that far too many people are familiar with. It doesn’t have to be that way. An effective budget can ensure you never have to feel that overwhelming sense of impending doom ever again.
Taking control of your finances and implementing a well thought out budget takes awareness and an honest assessment of your needs. Too often we mistake our wants as needs, and this may be one of the contributing factors to your overspending.
An honest look at your income and expenditure
Creating a budget forces you to look at not only how much you spend but how
some time. If you have been providing good service to your employer and feel you deserve an increase in pay, this may be the time to ask for one. If married, both you and your partner need to assess your income and decide whether there are grounds for asking for more.
Listing all of your expenditure makes you realize that there are plenty of opportunities for money to ‘leak’ out of your pockets. A budget will quickly and clearly show where those leaks are, so that you can then plug them up. You may be surprised when you find out how much disposable income you have when you stop spending indiscriminately.
Reducing stress and improving your relationships
Money worries are a major cause of distress within a marriage. Creating a budget and living by it can bring a you and your partner closer together. Both of you can discuss your financial concerns openly and honestly, and it allows for a better understanding of each others point of view. Working together to solve your money problems can make your marriage stronger, as well as greatly reducing the stress that both of you have been living under. Knowing that you no longer have to feel that you are battling your financial problems alone is liberating.
A budget can change your life by bringing structure to your relationship and / or family, where perhaps before there was none or very little. Where once one of you would have paid the bills as finances allowed, always feeling like you were fighting a losing battle, you can now both sit down on a regular basis and pay the bills together. Declaring your expenditure between budget meetings can keep your both accountable. This does not mean that either of you should feel guilt over necessary spending. Instead it makes you aware of how, where and why you spend as you do.
Learning to save
An effective budget will encourage regular saving, no matter how small an amount you can manage at first. While previously there was never money available for a vacation, with regular saving you can plan to take some well deserved time off from your job and get away for a while. Even a weekend vacation can be therapeutic, particularly if finances have prevented you from taking time off for any great length of time. Taking a short break every so often is vital to your mental and physical health.
While it is quite normal for parents to want to keep their financial problems to themselves, a couple can share their budgetary plans with their children. Kids seem to always ‘need’ something, whether it be a new pair of the latest trendy jeans, or money for a school trip, or any number of other costly things.
Once your children are made aware of the financial problems you are having, and the budget that you have put in place to address those problems, they can get on board with you and help to keep spending to a minimum. Sharing your problems (where applicable) with your children makes them feel that their input is important, and can be great for their self esteem.
Why budgeting will change your life
Having to face up to your past mistakes and learn from them is important to your own growth. Being responsible going forward is encouraging. Managing your finances, reaching financial goals and meeting your responsibilities is very rewarding. If you are in serious debt, it can be very satisfying to see the progress you make as your debt gets paid down. A budget will also teach you the skills to avoid ever getting into debt again. A budget truly can change your life!
My name is Kevin Watts and I am the creator of Graduating from Debt. I was like millions of recent college graduates in heavy debt with very little hope. With the right attitude and discipline I took control of my financial picture and now I can say proudly that I am debt free.