Budgeting 101

Yes, the "B" word and no its not a curse word “Budget.” Please, don’t click off the page yet and give this article a chance. For those who bake would you start to bake a cake if you don’t know if you have all the ingredients? Would you follow the recipe or plan for that specific cake? Of course you would or whatever comes out of the oven wouldn’t be called a cake but more like a mystery. It is very important to have not just the right ingredient’s but also the recipe and that is exactly a budget. A budget is the recipe and the money allocated that make up the budget are the ingredients. Now, before you leave this article and go and buy a cake I will give you another example: Let’s go with a sports team, which has coaches, players, practices, plays, and games (championship is ultimate goal). The team’s games (championship is ultimate goal) would be the budget and the coaches, players, practices, plays are the ingredients and what goes into the plan to reach the goal. Stay tuned to “Coach or no Coach” coming soon.

Now, your budget will be hard at times, but more important then the cake or a sports team even for professional players because they run out of money also if they don't have a plan for it, which is a whole article in itself. The budget is the key to having financial freedom in your household, business, and even non-profit. Remember if you don’t have a recipe or “budget” what comes out will be a mystery and you will wonder what happened and where did it go? (Read “Looking Forward” if you missed it)

Here is a link for 5 budgeting myths from Ramsey Solutions http://www.daveramsey.com/blog/5-budgeting-myths-falling-for