You'll Always Be Broke Without a Budget

Photo by sodapix/F1online / Getty Images

Photo by sodapix/F1online / Getty Images

Today the word budget has garnered a negative connotation for some strange reason. You hear the word and immediately think of lack or deprivation. Although both of which may not be bad things depending on your financial goals. But over time America has adopted an instant gratification, consumerism mindset. It is the “we want what we want and we want yesterday” attitude. We see, we like, we buy. Often times this buying isn’t even with our own money thanks to credit cards. Without taking a step back to analyze the big picture one may not realize that this often can lead you nowhere fast.  

Everyone must have a budget. The budget serves as a road map to your money. Without a map/budget you have no idea where your money is going. This does not mean don’t enjoy your money and the good things that it can acquire, however we must put guidelines in place in order to build a better tomorrow for us and our families.

Here are three easy steps to put your implementation of a budget on a fast track.

1.List all financial obligations:

Most people do not know where their money goes. They casually spend money with no direction applied to their spending. Money comes in, money goes out. This is leaving your financial future hanging in the wind. By detailing your expenses this puts everything out in front for you and allows you to make plans accordingly thereafter. The simplest way is to get a piece of paper and write down each monthly bill.

2.Determine necessary versus discretionary expenses:

The first and most crucial step in the budgeting process is to separate necessary and discretionary expenses. This involves allocating your money to what I like to call the “pay it or lose it” obligations. These are the expenses that if not taken care of, or you will no longer have access to the service, i.e. your home you will evicted or you will lose, utilities will be shut off, and your car will be repossessed. Discretionary expenses are those that are regarded as wants and not detrimental to your well-being if they were eliminated. These mainly include entertainment such as eating out and various other forms of entertainment. However, you must be defined in what categories you place your expenses; eliminate all gray areas.

Allocate money to savings and investing:

Most people who fail to have a budget in place, neglect to allocate money for savings and investing. Between 10 and 20% all your income should be set aside just for saving and investing. This is not a grand amount of money but consistent action over time can pay off huge in the long run.


Adjust and monitor activity accordingly. Life happens and your obligations will continually change while emergencies will pop up.  There is a good chance the budget you put in place today could look completely different in a year from now.