Have you ever looked at your yearly earnings and wondered, “Where did all that money go??” This is a pretty typical feeling around tax time when you see your total income on those W2’s and then get a feeling like someone must have stolen some of your money along the way. In actuality though, you know it was you. If you are ticked off enough, maybe you will start a budget. That is what I did!
The Purpose of the Budget
Since I am a single a bachelor, it is easy to manage my money. I don’t have to collaborate with someone else and discuss how we are going to save for the future (or for some of us, how to not spend in the present). However, since I don’t have anyone holding me accountable, it can be easy to make large purchases without thinking twice about it. As my bank account continues to grow I could be tempted to buy that jaw-dropping-stick-my-tongue-out-and-drool 65″ LED Smart TV. After all, I have the cash in my account to pay for it! Without a budget to hold myself accountable, it would be difficult to hold myself back on this purchase, but with a budget I would be forced to think outside the box and make more money if I thought I really needed it (since it is obviously not in my budget).
Budgets force you to think forward in life. If you have absolutely no plans or aspirations for the future, then a budget makes no sense for you. Just go ahead and spend blindly like you always have in the past. But, if you have goals and dreams (such as early retirement, world travels, or helping your children get to college), then I would strongly suggest a budget.
Even though I am single, I still have dreams for my future. Mostly, I would just love to have options and enjoy doing the work that I do. If I work, it will be because I want to, not because I need the job to feed my [future] family. My next step in achieving this massive goal is to pay off my house mortgage. And, in order to do that, I most definitely need a plan! This is why I budget.
My Budgeting Success in February
If you recall, January was not a great budgeting month for me. I was just getting back into this whole “watching where my money goes” thing, and I have to say that I really didn’t do all that well. I spent too much on my groceries and my car had a few untimely expenses, but all in all, at least it was a start.
February was much better. I had a goal to spend $1,995 and I only ended up spending $1,655! I spent very little in gasoline and accidentally missed a charity payment (my credit card was hacked, so I was issued a new card which messed up my automated charity deposit), but I overspent in utilities (it has been bitterly cold here in Michigan) and groceries. All in all, it was a pretty good month though – I was definitely pleased with my lack of spending.
Getting Wealthy With a Budget
To be honest, being on a budget really sucked at first. Every time I went out to eat with my friends I thought to myself, “Is this meal putting me over my grocery budget?” and it was somewhat difficult to enjoy the experience. However, I am kicking butt on my bigger goals to pay off my house (which you will see in a post tomorrow). Money is finding its way into my bank account like never before and I will soon be making massive payments on my home mortgage! I can’t wait to report this to you soon.
So what happens once the mortgage is gone? Well, it’s quite simple really. My bank account will grow even faster, which will allow me to invest so that it grows even faster! Following this Dave Ramsey plan has really been difficult. I have traveled a long road, but I am finally able to see the benefit – I just hope that I can take all of you with me as well! Make your budget, get out of debt, save up that cash, and be rich!
The Weekly Round-Up
There are quite a few fantastic personal finance bloggers out there. Here are a few articles that caught my eye this week:
Top Mistakes That Are Hurting Your 401(k) Returns – by Financial Samurai
Why You Should Hang Out With Your Professor – by 20’s Finances
Why Keep Playing the Stock Market Game If You’ve Already Won? – by Retire by 40
The Key to Side-Hustle Success: Focus on What You Know – by Beat the 9 to 5
The Right Way to Consolidate Your Student Loans – by The College Investor
How to Determine the Value of Anything – by Squirrelers
5 Ways to Put Your Business Degree to Work For You – by A Young Pro
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.