This topic is adapted from the Living Even Keeled YouTube channel.
Managing money is one of the biggest challenges in adult life, although no matter how much of it you have, money always seems to disappear without a trace. It’s shocking to find out that some of the richest people still live paycheck to paycheck. They seem to have everything, a great job, a big house and a nice car, so how are they broke by the end of the month? The answer is pretty simple, they don’t live within their means. They don’t stick to a budget.
The Purpose of a Budget
Living within your financial means is not only important to a healthy lifestyle but is also essential to building a good marriage and family. Being disciplined enough to not only set a realistic budget but to also live within that amount of money will build character. A budget also allows people to save for vacations and retirement because they know where they money is going.
Make a Budget
Building a budget can sound overwhelming but it’s easier than you may think. Most people know about how much money they will have each month. Next, start by planning out the largest broad categories that you spend your money on then narrow down to more detailed spending trends. For example, list out the big areas like groceries, bills and shopping. If necessary break down some of these categories into areas like coffee, clothes or even divide them into specific stores that you frequently shop in. The main point to a budget is knowing where your money is going.
Track your spending for several months as you begin to get a handle on how you spend your money. Staying organized is really important to budgeting and a cheap calendar can help. A calendar will give you an easy place to record your expenses and also create a quick history you can look back on to analyze your trends. Recording your expenses daily is the most efficient way to keep track of money but sometimes it’s easier to write it all down at the end of each week as time allows.
Tracking every detailed expense isn’t actually the end goal in budgeting. The purpose of recording all this data is learning to stay within a budget. Often using cash only for purchases is the easiest way to stay accountable. Take out cash for each category and make that cash last for the month. It can be extremely easy to spend five dollars here or ten dollars there when you are swiping a card but if you have a finite amount of cash on hand once it’s gone it’s gone. Finally when budgeting make sure to pay yourself first. This could be a few hundred dollars into savings or a little bit of money into a 401k. Building healthy saving habits can also be a huge benefit when starting out on a budget.
Discussion Questions:
- Watch the video together or invite someone to summarize the topic.
- What is your initial reaction to this video? Do you disagree with any of it? What jumped out at you?
- How could a budget help develop discipline? Give one example.
- Do you believe financial stability help relationships? In what way?
- How could sticking to a budget help someone?
- Have you ever tried budgeting? If so explain your experience.
- Write a personal action step based on this conversation.
