It’s election season in the US, and if you’re like me you’re tired of listening to the talking heads and seeing all the negative ads on TV. Regardless of what side of the aisle you line up on, one important thing is getting lost in the hubbub, and that’s our country’s debt and lack of a budget. The numbers say that the US government has been without a budget for more than 1,000 days…that’s nearing three years folks. Meanwhile, our nation’s debt has grown to just over 16 trillion, or $51,000 per person. I don’t know about you, but as a frugal person that number just churns my stomach.
Now, a budget won’t not cure of all our country’s ills but we won’t get healthy without one. To put the numbers into perspective, consider what has happened since our last budget was passed:
- The iPad was introduced
- BP’s Deep Water Horizon spilled a ton of oil in the Gulf
- Swine flu scared us and Mexico silly
- Wikileaks informed us
- A Haitian earthquake killed nearly 250K people
- The ”Flash Crash” on May 6 reminded us of the fragility of our stock exchange system
However You do it, a Budget is Essential
There are as many varieties of budgets as there are stars in the sky. Whether you use a piece of paper, an Excel spreadsheet, or an online budgeting tool really does not matter in the end. The thing that matters is that you do some budget planning and get to know your numbers. If you don’t choose to live frugally, that’s fine as living with a budget does not necessarily mean that you have to live frugally. A budget helps both frugal and non-frugal people to know where their money is coming from and where it’s going. I find that actually putting the numbers in some sort of concrete fashion really increases the probability of success with my budget. In the end, my goal is to have financial freedom. That is freedom from debt, freedom to do things I want to do and freedom to retire when I choose and living with a budget allows that for me.
Find What You Like in a Budget and Stick to it
I would be lying if I were to say that once I started budgeting that everything went smoothly from the get go. A good budget takes time to develop. I remember starting and stopping numerous times until I finally found what worked for my family. That’s because you have to begin to think what’s most important for you and how you’re going to get there. For me, it was initially to get out of debt and now it’s evolved to saving money and looking at more long term goals. What this forces you to do is to look at your income and see where exactly your money is going. If you’re living without a budget, like our country is, then you’re more likely to make mistakes that land you in debt or at the very least derail things you’d like to accomplish in life.
Living With a Budget is not Burdensome
I know the perception of living with a budget means that you can’t spend money how you like. I know that was the impression I had when I was spending money like a sugar fiend throws down Ding-Dongs, but that is simply not the case. I’ve actually gotten to the point where I love to live with a budget. I know what my priorities are and I can spend my money however I want… if the money is there. This gives me financial freedom and allows me to go on a nice vacation because I have the money for it. I can go on vacation and do it guilt free because I’ve made other frugal choices and set my priorities to allow me to freely do as I choose with my money. I am not borrowing from Peter to pay Paul and in the end I don’t have to worry about the debt (unlike our government).
In the end, there are many things we can learn from our government, some of them good. But, living without a budget is not one of them. What has budgeting taught you? Of, if you don’t keep a budget, what strategies are you using to manage your finances?
Photo courtesy of: Harrison Keely