‘’ a budget is telling your money where to go instead of wondering where it went’’ – Dave Ramsey
Money is like emotions, you control it to keep your life on track. Money in the bank is like toothpaste in the tube, easy to take out but hard to put back. When money realises it is in good hands, it will want to stay and multiply in those hands. The rich have mastered how to treat money so they keep getting richer and the poor, poorer.
Your salary cannot make you rich but your spending habits. To become wealthy, you must live on less than you earn. No matter how much you spend, you will always have unfulfilled desires. This is a fact of life. You must have heard of the Parkinson’s Law which says that your spending will always expand to use up the money available. You must conquer this law if financial independence is your goal.
This is where budget comes in. Budgeting simply means control. As responsible as the word ‘budget’ sounds, it is often misunderstood and hated by so many people. Some says it takes the fun out of life while others are scared of numbers. Budgeting is always at the centre of political animosity between the legislature and the executive. But budgeting is not a matter of math; it’s a matter if controlling you.
A budget is not just a collection of numbers; it’s an expression of your values and aspirations. In budgeting, you spend every naira on paper, on purpose before the month begins. You tell your money where to go instead of wondering where it went. Every sensible person, family and organisation must have a budget that lays how money will be spent.
A budget will tell you what you can afford, but it doesn’t keep you from buying it. This is why discipline is the key to successful budgeting. A good budget must be dynamic. It should change as your life changes. It must not be cast in gold. Furthermore, always remember to follow the golden rule: do not over budget.
It was Warren Buffet that said , ‘those who consistently buy things they don’t need will soon have to sell things they do need’. Stop making impulse purchases, start making mindful decisions. Stop saving what is left after spending, but spend what is left after saving. One of the best treatments for money that I know is to control it and budget is a handy tool to achieve this