Day 12: What is a Budget?
by Edward Smith
17 Jul 2020
Budget's Don't Work if You Don't Have One
When you earn a paycheck, you should have a budget. Budgets are not just a good idea. They should be a mandatory requirement, punishable by heckling and ridicule. Budgets keep you safe. They keep you on track. They prevent you from stealing from yourself.
Budgets may not be the American way, but American's are pretty well known for not being great with their money. Why do you think credit cards and payday loans do so well? Budgets are how you beat the odds and remain responsible. Do yourself a favor. Create a budget!
Educate Those Dollars!
Think of your dollars like a class of young children. If you put 1,000 kids into a class room and don't set them up with a plan to keep everyone on task, you're going to have 1,000 flying projectiles shooting off in different directions.
Talk about destructive. Heaven forbid that the class day ends and you discover some of those kids went missing, and you have no idea where they went.
Budgets tell, every dollar that you make, what to do, where to be, and what their job is. It's like assigning Bobby to collect all of the markers, and it's like telling Sally to stack up all of the chairs. Everybody knows what their job is, and there is no confusion.
That's how you want to treat your paycheck dollars. Keep it all organized. Tell each dollar what to do!
Unemployed Dollars Become Stupid Dollars
No dollar should ever be unemployed or left to figure things out on their own. Without guidance and direction, money will prove over and over again that it can be very stupid.
It's like a thrill seeking teenage boy being left at home alone with a bunch of fireworks and matches for too long. It's probably a bad idea. Money must be guided. It must be shown what to do. It must be given clear instructions. If you don't take the time to manage your money, your money is on it's own, and will likely get into trouble.
What kind of trouble? You'll wonder why your electricity bill wasn't paid, and why you spent thousands of dollars eating expensive sushi dinners every night. Sushi is awesome! I love sushi! I highly recommend it. Problem is, I hate eating sushi in the dark, and I hate eating food I can't afford. Who turned off the lights? Oh. I did.
Not having a budget can lead to unexpected surprises. If you're lucky, those surprises will end up being funny. Maybe you'll share a few laughs in the dark with your new raw fish friends over an overpriced dinner you couldn't afford. If you're unlucky those surprises could be really dangerous.
What if you don't have enough to pay for the medicine that keeps you okay, or you can't buy new glasses to see when driving? What happens if your A/C cuts out during a heat wave and you're trying to take care of a small baby?
You have enough problems. Don't become one of them. Don't set yourself up for an ambush.
Know what is going on with your money. Create a budget. Tell your money what to do.
It could save your life!
Do you like this? Want to know how to set up a budget?
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