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The Importance of Budgeting
Budgeting is more about developing a habit you can stick to than it is about money. We already generally know how much we’re going to make in a given period, and predict how much we need to spend. What can put us off-balance are the irregular expenses: the flat tire or the hospital stay. While these events often visit us unannounced, they really aren’t all that unexpected when you think about it. That’s why it’s important to also budget for these unpredictable expenses.
There is no one singular correct way to go about a budget. A budget can be as flexible or defined as you need it to be, and you can budget for the month or for the year. As long as you have a general framework for where your money is going and why, then you are already putting yourself in a better position. Some people use computer programs to track their finances down to the penny; others divide their cash between a few envelopes with labels like “groceries” and “clothing” and spend only from those envelopes for those items. Whatever the method, merely having a plan for your cash flow can keep you on the right track and in control of your finances.
There’s a great quote that sums up how important it is to stay on top of your finances: failing to plan is planning to fail. Either we are in control of our money (and our future!) or our money controls us. Putting together a budget is the easiest way to take control, but developing the behaviors needed to stay true to the financial plan is what really counts.