Budget is a word that tends to bring up negative feelings. It can be very freeing and place you in a position of strength. FACT: We all have a budget, meaning we have resources and we have activities that must be or we want to have supported. A budget is an organized recognition of financial management. It is aligning our resources (income) with our disbursements (expenditures). Often, individuals or families can tell me to the penny what their income is and yet struggle to account for their spending.
A budget needs to be both flexible and rigid. Adhere to and recognize that life is in flux. Setting up realistic expectations of your resources and differentiate between needs and wants. Know when you truly “need” to spend and when. Acknowledge the emotional aspects of spending all come into play. We all have limited resources and the old adage that money does not grow on trees is so true. Yes, credit cards make it easy to make purchases, but that is not the same as paying for something. The piper will be paid and it can be very expensive when all is said and done.
Adults, I feel, need to have “play” money, an amount they can use for impulse, just because, or in joy of an accomplishment. This “play” money amount is not to be open-ended. Parameters need to be set and followed. The amount needs to be within ones resources and aligned with your over all strategy.
Setting budgets, acknowledging the difference between needs and wants, seeking to make purchases with intention and with the ability to pay for the expense takes less time then you may think. It does take communication, cooperation and the willingness to restrict your rationalization impulse.
Individuals, couples and families who share their goals and determine what is really important to them, have started on the path to financial security. Take action. Starting with cash flow, mapping out a budget, taking the action to keep within a budget and monitoring those actions, will allow you to have control financially in ways that those who are working blind never will. Budget, is not a dirty six letter word, it is a word that describes financial stability, flexibility and intentional choices. It is a positive activity.
Provided by Nancy J. LaPointe.
Nancy J. LaPointe is a Financial Services Representative of Metropolitan Life Insurance Company (MLIC), New York, NY 10036. Securities products offered by Nancy J. LaPointe, a Registered Representative of MetLife Securities, Inc. (MSI) (member FINRA/SIPC), 4520 Intelco Loop SE, Suite 1E, Lacey WA 98503. MLIC and MSI are MetLife companies. L0212237026[exp0213][WA]