SMS 129 – Budgeting Part 1 – Why Budgeting is Important

Part 1: Why have a Budget

To survive without budgeting at some point would require the use of credit or a very extremely conservative lifestyle which would mean lost opportunity.

Very High level – How to Budget

  1. Tracking income and expenses – find a tool and develop the skills
  2. Set spending parameters – this is where the “why” becomes important
  3. Project future income and expenses – this is the real payoff to budgeting

Budgeting Myths:

  1. Budgets are for “poor people”
  2. Budgets are restrictive
  3. Budgets are temporary
  4. Budgets are “one size fits all”

Why Budgeting is important:

  1. Provides a roadmap with directions to your goals
  2. Budgets identifies problems before they occur
  3. Makes you aware of where your money is going – automation is your enemy
  4. Budgets drive behavior change – you need to review your budget regularly

Budgets are a tool for decision making

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