Budgeting Basics: This Won't Hurt a Bit

November 09, 2020

What comes to mind when you hear the word "budget?"  You’re not alone if you’re thinking “tedious, life-draining sacrifice.”  The same thing can happen when we hear the word “diet.”  Best-selling diets are typically defined by what is forbidden, not by what’s allowed. 

But in the big picture, we’re all on a diet.  Some diets are just healthier than others.  Most are healthier than mine.  A diet is simply a balance sheet that tracks calories consumed and calories burned.  If we feel content and everything is in balance, our work is done.  When we want to reach specific goals, we can adjust the balance to get on track.  Focusing on our goals makes a diet less about sacrifice and more about staying in balance to reach an objective. 

Budgets work the same way.  We may not need to think about our monthly budget if we’re happily rolling along.  Our budget becomes more important when we’re making an important financial decision, such as a career change or major purchase.  At that point, a budget helps us understand where we are and what steps we can take to help us reach our goals.  In this way, a budget is a decision tool that can help us feel more confident about the future. 

So when your doctor asks about your diet, or your financial advisor asks about your budget, they’re not prying scolds.  They’re simply helping you keep on track and stay healthy.

You can learn more about creating your own budget and download our simple spreadsheet by visiting the Budgeting Basics section on our Clients page.