As a blogger, I am always reading other personal finance or related blogs to see what others are writing. Not surprisingly, budgeting is a HUGE attention grab and I bet over 50% of personal finance bloggers out there are blogging about budgeting in many ways. For instance, some bloggers post their excel budget worksheets on their blogs and some bloggers share diagrams on where their money go to every month.
In my last podcast, I talked about creating a budget is a money management skill because you are reminded on how to use your money.
But creating a budget is one thing, being disciplined about it is another.
Imagine you make $3,000 a month and you have to pay the following:
- Student loan – $500/month
- Rent (utilities included) – $1,200/month
- Groceries – $200/month
- Cell phone – $100/month
- Car and gas – $400/month
At the end of each month, as a result, you have $600 left and you plan to save the first half and spend the other half.
If you are disciplined, you would stick to your plan. Eventually, you would see your money “growing” in your saving account and you have a better chance to reach financial freedom.
On the other hand, a non-disciplined person would spend more than they intend to save and could potentially be in debt.
Let’s look at another example.
Suppose you are an aspiring entrepreneur and you have created a business plan for your start-up. Having a great plan is a good start in order for your start-up to be successful, but most importantly, having the will to succeed is what makes the difference. Businesses without entrepreneurs who are willing to hustle and make sacrifices are going to fail.
Similarly, a budget would not work if the person creating it is not disciplined.
As a result, I never create a budget because I understand not only I have to pay myself first, but also I have to pay off my debt first. That’s why most of my monthly salary goes to paying off my line of credit. After that, I would deposit a small amount into my saving account and use the remainder for my expenses.
So do you currently have a budget? What has changed in your life since you have created a budget? Please leave your comment below. Catch you on the flip side!