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Saturday, August 4, 2012

The Family Budget

When I think about budgeting, I can’t help comparing it to dieting.  Both seem to induce negative attitudes from people and nobody wants to talk about it or think about it and it gets put off.  But it doesn’t have to be that way.  A healthy diet is not about limitations and what you can’t do.  And neither is a healthy budget.  It can actually be quite liberating.
            If you don’t have a budget, you will often be scared to spend money because you don’t actually know what you can afford.  You may even have yourself convinced that you can’t afford anything you want and therefore don’t let yourself want anything.
If you don’t have a budget, you may spend everything you earn and then be surprised by a regular bill and not be able to pay it.  Or you may have ‘maxed out’ your credit card and be stuck paying large amounts of interest for things you no longer have or can’t remember purchasing.
But if you know what bills are coming up and have a set amount put aside for ‘play money’ then you can take full advantage of opportunities to spend money on things that you want.  You can even enjoy the planning for the purchase of these things rather than buying something on impulse and feeling guilty later.
The best thing about budgeting is that you don’t actually have to stick to it.  It’s like any new skill, you won’t get it right the first time, but have another go next month and work at continually improving.  If you make a mistake, don’t beat yourself up or throw the whole thing out the window. Acknowledge that you tried and try again.  Here’s a simple starter template for you to have a play with.  Make sure $A = $B+C+D+E+F.  You can do this just for your income or you use it for your end of month bank balance as well.  Happy budgeting.

Investment fund
Regular Bills
Savings for expensive stuff
Play money

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