For the first several years of our marriage my wife handled all the money for our family. At times we would get frustrated with each other which would inevitably lead to some intense conversations. I am sure that you have NEVER experienced a situation like this! My wife continued to get more and more frustrated with me for my lack of engagement.
One day I happened to find myself engaged in a conversation with a friend about money. It became obvious that this person was alone in handling the family’s finances. Immediately, I was smacked in the face by the emotional frustration I was causing my wife. I had been acting in the same manner as the spouse that frustrated my friend! It was a dramatic realization!
After this experience I began trying to figure out how I should respond and what I should do to solve the problem. Shortly thereafter, I became convinced that I needed to step up. It was at that time that I begin to play a role in handling the finances for our family.
Let me step back a moment and say that my wife was in no way doing a poor job with our finances. She holds a masters degree in accounting and knows how to handle money. The problem was that I was not participating in the process with her. Looking back, my attitude was one of expecting to be able to do whatever I wanted with money. I just expected my wife to make the numbers work. Sounds rather childish, right?
Before this time in my life, I had never operated within a budget. Sure, I knew the concept, but I had no practical hands on experience. As I began to step into handling the finances, I had to discover why a functioning budget is important.
There are several reasons why a monthly budget is essential for success. Here are just a few of them:
- To know where you spend your money. Pretend for a moment that upon eating something you immediately forgot what it was that you ate. After a while your body would begin to show the results of all that you consumed. You would know something is wrong, but you would know what specifically. Now, relate this to spending money. If you are not aware of where you are spending your money, you cannot identify specific areas for improvement.
- To direct your money to the right targets. Imagine getting in the car to take a trip to a destination you have never been before. What is the first thing you are going to do? Grab your GPS or navigation app and punch in the destination, of course! You want to make sure you actually arrive at your intended destination. The same concept is true for money. To accomplish money goals you need to prepare the instructions for where each dollar is going to go.
- To build or maintain a buffer/cushion between you and life. Every one of us experiences moments in life that increase our stress levels. Many times these moments involve the unexpected need for money. Cars break down. A family member passes away unexpectedly. You find yourself on an unplanned trip to the emergency room. When these events occur stress levels rise. When you are not sure where the money is going to come from, stress levels can ratchet up even higher. If you set aside money for unplanned events, you are creating your own cushion to rest upon in time of need!
One of my goals in creating this blog is to help others begin to move toward their dreams. I am convinced that living on a monthly budget is an important part of that. It is critical to live within your means. Next week, I will try to tackle the “how to’s” of preparing and living on a budget each month.
Question: Are you currently operating a monthly budget? Why? How is it working for you? You can leave a comment by clicking here.
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