In other words, a good budget informs the budgeter whether a potential purchase is feasible or whether adjustments will need to be made.Īt its best, a budget acts as your own set of “checks and balances.” It ensures you aren’t spending money where you shouldn’t be and identifies areas where you can afford to “live a little.” When done correctly, budgeting feels less like a constraint and more like a free pass to go about your life without fear of overdrawing your account or forgetting a huge bill. How does a budget achieve this? Through accurate and “granular” categories, by following a budgeting strategy that is simple to implement, and by using tools that make the budgeting process seamless to your day-to-day life. What makes a successful budget? Photo by Mahmud Ahsan on UnsplashĪ successful budget should do one thing and one thing only: drive financially sound decisions. In this in-depth guide, I am going to walk you through how you can successfully budget and achieve financial security with the right tools and processes. If you’re going to be rich - or at the very least well past living paycheck to paycheck - then it’s important for you to know where every penny goes and what purchases are worth the expenditure. “If you are going to be rich,” says Robert Kiyosaki, author of the bestselling Rich Dad Poor Dad series, “you need to be accountable for your money.”īudgeting then plays a huge role in your financial security. And accounting is derived from accountability.
To some, it brings about a sense of existential dread and the sad realization that money never seems to stick around for long.īut budgeting, when you think about it, is nothing more than personal accounting.
To many, budgeting is a tedious task of number crunching and filling out spreadsheets.
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