What do you think of when you hear the word “Budget”? Do you think broke, cheap, tight with money, constraints, controlling? Well, by definition it is: an estimate of income and expenditure for a set period of time. Simply, your paychecks and your spending habits during a billing cycle. You will most likely become broke, if you don’t balance your budget and for the other words, cheap, tight etc – some of the wealthiest people are very cheap and tight with their money – and most of us desire their lifestyle. Notice I said “wealthiest”not “richest”, some of the richest people will go broke real quick after a downfall.
Budgeting is all about discipline, learn to budget, practice the art of it and you will see the benefits to decide your path.
We all know math, to keep it simple— the point is to stay in the positive.
Examples of good budgeting
10-7 = 3
10-10 = 0
10-2 = 8
Examples for bad budgeting, in the negative
10-13 = -3
10-19 = -9
10-21 = -11
Now apply this logic with your income (+) and expenses (-), and be sure your budget stays on the positive side. I describe setting a budget in one of my blog posts (Set a Budget) if you would like more examples.