Provided by IMC! Peer Mentor: Carlos Teran
All you need to do to achieve financial security is spend less than you make. Pretty simple right? Despite the simplicity of the rule, 40% of American adults would have difficulty covering a $400 emergency with cash, over 40% of Americans have less than $10,000 saved for when they retire, and the average American saves less than 5% of his or her disposable income. Just because the rule is simple, does not mean it is easy. As Americans we are being marketed to and told to buy products every second of every day. We even pay for products that help us buy more products. With all this noise, the great enigma is how do we keep our money in our pockets when everybody and their mother is trying to take it from us? Again, the solution is simple, but not easy. The first ingredient of the remedy is a budget.
Budgeting, much like stretching, is seen by many as an unnecessary and tedious task. However, also like stretching, it is healthy and relieves stress and tension. A budget is a plan for every dollar you will make and spend. Having a financial plan doesn’t necessarily relieve all stress, however it is certainly less stressful than having no plan at all. As Zig Ziglar says “If you aim at nothing, you will hit it every time.”. Coupling your budget with SMART goals is a powerful way to relieve financial stress and feel better about where you are headed. The largest companies in the world use budgets to keep track of expenses, measure performance, and achieve their organizations goals. If they do it then so should we.
I have only been budgeting for a few years. Since May of 2019, I have detailed every penny I have made, and penny I have spent. I know down to the cent how much I have spent on clothes, utilities, food, dates, school supplies, rent, gas, and anything else I may have purchased. But what is the big deal about that? Also, why would anyone ever brag about that? The big deal is that now I can anticipate monthly income and expenses accurately and put a plan together to achieve my financial goals. For example, my goal is to save enough money to buy a car in May of 2022. Even while going to school my budget has helped me stay on pace to achieve my goal.
All of this to say, I am in love with a good budget. It allows people to set a plan to achieve what they want in life. It is the first step to financial independence and security. If you are looking to get started on your budgeting journey, here is the link to some of our budgeting tools at It Make$ Cents.
Happy budgeting!
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