Budget. Just the word makes so many people recoil. It has connotations of being constrained, of being told you have to say no. Of being limited, of cutting out all luxury and fun.
April is financial literacy month and, as much as nobody likes the idea of being “put on a budget,” knowing what you spend is an important part of being financially literate.
In honor of that, I encourage us to turn around our perspective. A budget (noun) is not prescriptive, a recipe for telling us we can have this but we can’t have that. It’s descriptive – an estimate of what it costs, on average, to live our lives.
A reasonable, livable budget is not about strict limits. It’s about looking at what it takes to make sure the necessities are taken care of as well as to cover the usual meals out, entertainment, and big and little splurges in a typical month. It’s about estimating the costs that come up unexpectedly yet always seem to come up, like a car repair, medical expense, or travel to a wedding or reunion and making sure there’s room for these, too.
It’s only if those expenses, when measured, add up to more money than is available for them that budgeting (verb) has to come into play. Yes, sometimes there are expenses that need to be cut. If you’re in that situation, the growing credit card balances and unpaid bills may already be making themselves known but the budget (noun) is what gives you the power to figure out how to turn things around.
Knowledge is power: only with a sense of what our lives cost can we plan for the unknown or for the future. It can be scary to take a deeper look and see where we’re spending our money even if we’re living within our means but, if done without shame and judgment, it can also give us the awareness we need to become more financially literate about our own lives.
Robin Starr is a registered representative of Lincoln Financial Advisors Corp.
Securities and investment advisory services offered through Lincoln Financial Advisors, a broker-dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln Marketing and Insurance Agency, LLC and Lincoln Associates Insurance Agency, Inc. and other fine companies. Athena Wealth Strategies is a marketing name for registered representatives and investment advisor representatives of Lincoln Financial Advisors. CRN-4662398-040622
Money isn’t rocket science, but with the amount of information out there and the number of issues we deal with in our financial lives, it can be overwhelming. Robin Starr, a CFP(R) Professional works with people to make things simple so they can gain clarity, stop feeling guilty, and spend their time and energy on what really matters. After all, money is really just a means to an end.