Win the Game with a Strong Defense – A Personal Budget

How is personal finance like football? In personal finance, winning means having enough money to pay your debts, buy what you need and eventually retire in style. In order to do that, you need to make money, save some money and grow those savings. Growing a large savings balance is like scoring touchdowns and field goals. You keep working at it, driving forward, until you get ahead.

But all that effort is wasted if the Defense lets that lead get squandered. Similarly, you can’t save enough to meet your financial goals if your spending is out of control. A good budget, like a good Defense, protects your lead.

Say you decided you want to save $500 every month. The first month, you did great and made your savings goal. The second month, you needed an extra $300 for car repairs (ouch) but you managed to save $200. Still getting ahead. The third month, one of your closest friends wanted to get away for the weekend and you really wanted to go so you didn’t manage to save anything. The fourth month, you were super busy and didn’t get a chance to track your spending. At the end of the month, you realize that not only did you not save but you have an extra $250 on your credit card that you need to pay off. Now you need to dip into the money you saved in the first two months.

The worst part is, you don’t even know what you over spent on. Your lead has been eroded and you’re in danger of doing it again next month. It doesn’t have to be like that. A good budget will keep you on track and in control.

A budget doesn’t have to be rigid or mean that you can’t go on vacations or treat yourself. Instead, a budget is tool that lets you decide how much you will spend and how much you will save. It’s your key to getting control of your finances. It doesn’t have to be time consuming either. Once you’ve got your budget set up, it will only take about 5 minutes each day to track your spending and up date your budget.

Your budget will give you a realistic view of where your money is going now. That can feel really empowering. For example, I know from my budget that I spend a lot on restaurants and take out food. I also know that if I need to free up some cash, I can eat at home more often which costs less. Using a budget helps you make conscious decisions about how to spend your money – where you want to cut and where you want to splurge.

Just like in football, where a strong defense makes all the difference in winning or losing the game, a good budget will make all the difference in paying for everything you need, paying off debts and creating a healthy savings balance.

I will be posting articles regularly about how to create and maintain your personal budget. To receive these directly to your inbox, please subscribe to my website at the bottom of my Home page.

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