In an age of credit cards, ATMs and redraw mortgages, the idea of creating a simple household budget has gone the way of the dinosaur – it seems as antiquated as an apron-wearing housewife stashing housekeeping money in the teapot for a rainy day.
Taking charge of the dollars and cents of everyday living expenses is the simplest path to financial security. One thing that will make you wealthy is spending LESS than you earn and the simplest way to do that is to budget.
“A lot of people are scared of budgets,” says Cath Armstrong, Cheapskates.com.au founder and author of Debt Free, Cashed Up and Laughing. “It’s just a piece of paper with some numbers written down. It can’t bite you, even if it does terrify you.”
Budgets are nothing more than a plan or guide to household spending. They are not a tool for punishment, deprivation or misery. “Budgets are about making sure what comes in is more than what goes out – once you’ve done that, it’s easy, people will wonder why they didn’t do it sooner,” Armstrong says.
The benefits of creating a household budget include:
· knowing exactly where your money is going;
· eliminating silly spending so there is more money for shopping, treats or even investments;
· less stress when the bills and credit card statements come in;
· creating a tool to help focus on long term financial goals.
Go on, it's not that hard is it? Do you use a budget or prefer to fly by the financial seat of your pants?