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Budget is a 4 Letter Word


The following is a guest post from LaTisha at Financial Success for Young Adults, where she writes about investing, trading and money management.

What Comes to Mind When I Say Budget?

Most people hear the word budget and cringe. I know because I used to do the same. The word budget is associated with tight pockets, home-made dinners, and do it yourself everything. What do you hear when you think of budget? “^%4&! I overspent again!” Seems to be a popular phrase, as well as, “Why can’t I balance this piece of $#!+ budget?

Did you know that budget is actually a four letter word, and it doesn’t have to be censored?


That’s the four letter word that I associate budget with. After reading The Millionaire Next Door, I realized that many millionaires made their way one dollar at a time. Obviously they were assisted by smart investing and I’m sure they may have started out as a young entrepreneur; but in general they achieved wealth by saving, investing and budgeting.

How to Use a Budget to Get Rich

There is one basic rule to getting rich and building wealth. It is so simple that a two year old who knows how to eat Cheerios can grasp the concept. When you have a handful of Cheerios and you eat them all, there will be none left. If you eat all but one, and save that one for a rainy day, after saving a Cheerio from each day for a week, you will have seven Cheerios. (Obviously you don’t want your two year old saving Cheerios, but I’m sure you get the point.) The rule, similar to the Cheerio story, is to use fewer resources than what is coming in. In other words “Spend less than you make.”

It’s really that easy.

How to Spend Less Than You Make

Even though the concept is easy, I know that finding extra money to save can be pretty difficult. I’ve tried to squeeze a dollar out of ten cents before, so I know how it is. Here are a few tips to help you get started.

Trick Yourself

Out of sight, out of mind. Set up your direct deposit to go into two different accounts. One that you will spend from and one just for saving. When you save automatically, you will be surprised at how quickly your rainy day fund will grow.

Launch an Attack

Find one recurring expense in your routine. It could be a daily coffee or late fees every month, or the top tier Netlflix plan that you couldn’t possibly use. Find a way to eliminate or reduce that one expense. When I cut out going out on both Friday and Saturday nights for Saturdays only, I saved $120 a month! In a year that’s an extra 1,440 dollars that can go towards investing and make me more money.

Figure Out How Much You Make

Let’s face it, sometimes we don’t even realize how much we are actually bringing in. I had a friend tell me how amazed he was when he calculated what he made from his odd jobs as a teenager, it was over 25,000 dollars! It’s easy to spend mindlessly when you don’t mind your money. That is a budgeting basic that cannot be overlooked.

Do you see a budget as a way to get rich?

Budget Money Save Money


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.


  1. I really liked that book. I’ve lent it out a couple times, and from the last time it hasn’t come back. On our next trip to the used book store, I’m going to get an extra copy. Good point about slicing and dicing one expense at a time.

      • Agreed. I’ve read it twice and just recently lent it to my brother. It’s easy to get distracted by all the shiny, new things everybody owns, but this book can help keep you on track.

  2. this is a very informative book on savings, being a spend theft, i feel the 1st person to use and learn tricks from this book my self.

  3. I also like that book a lot and have read it a few times. I like your Cheerio example. It wouldn’t take long and you would have a full bowl of Cheerios.

    • Imagine if you had enough for two bowls! I’d like to have a vault, kind of like Mc Duck had a vault of gold. lol But I guess I’d rather have the gold than the Cheerios 🙂

  4. Great post! I needed the reminder to check up on my spending. I have cut most everything that I don’t need out of my budget but sometimes bad spending habits sneak back in! (like my daily $1 tea from Hardee’s)

    • Yes! Those sneaky small purchases add up quick. The same way a person can overeat without thinking, it’s possible to overspend without thinking.

  5. If it was not for a strict budget,my wife and I would not have been able to afford our new vehicles and our home.We stayed to it and it paid off well because we sold our home 3 years later for a huge profit. Now were at it again sticking to a budget and buying a new home.We did this all starting small and sticking to a budget no “if ands or buts”.

  6. Budget is not a four letter word. It is how we perceive it. To me, a budget is a road map to where I want to be. It is a structure to help me get there. It helps keep me disciplined. After saying that, I put a lot of the elements of a budget on automatic. I set up a payroll deduction for my 403B, IRA and Roth IRA. I watch my expenses and look for exceptions.

    • So true! A budget can be a great thing especially when it provides structure. That is a good way to build up your nest egg by making the automatic transfers.

  7. Love the simple psychology Derek. It’s so easy and yet so difficult for so many of us to do well. I like the automated options to save and pay bills.

  8. My favorite website for budgeting is It is a life saver and it has helped me enormously to achieve my financial goals. Great post!

    • Thanks! Mint is great for budgeting! I like the fact that they allow you to categorize spending and save for large expenses with their tools.

  9. Nice post. I knew budget wasn’t a four letter word so it got my curiousity up. Good job. 🙂 I liked the message to focus on one bill at a time and not overwhelm people that don’t like budgets very much. It really is amazing how setting aside a small amount of money each week, month, etc. can really add up.

    • Thank you! Yeah, if people will realize that a budget can be a good thing I think they will be more willing to use one for planning.

  10. Great post! It is amazing how much much money slips through the fingers when you aren’t keeping track of what you are spending. By doing that for even one month, you can find many ways to save.

    • Yes, it really is as easy as keeping track. I know that many budgeting coaches recommend the envelope system to help people stay on track.

  11. I believe budget is a 4 letter word when people do not create an adequate budget. If you budget $50 for groceries and you KNOW that you cannot live on $50, then you will utter a 4 letter word. If you take the time to create a reasonable plan and you learn that you can live on a $78 grocery budget and then you STICK to it, you will not curse.

    • Yeah, I used to ‘budget’ but then over spend. Now my goal is to spend under my budget and I dare my self to beat my already tight budget by an extra 30 or 40 bucks. Soon I will be trying to beat it by a few hundred!

  12. Absolutely! And I love budgeting 🙂

  13. That’s a great tip about recurring expenses. I launched my own attack on these at the beginning of the year and I’m reaping the benefits every month. Even a $10 a month saving adds up to a useful $120 over a year.

  14. Great post, budgeting got my butt back on track and hellsyeah I’m going to be a millionaire some day. Just wait 🙂

    • That’s right you’ll be a millionaire! Keep saving those nickels and you’ll be there! 🙂

  15. I have spent approximately 30 years in the area of corporate planing and budgeting and all I can say is your blog is dead on. Its a simple formula Profit=Income-expenses, income must always be great than expenses otherwise your have nothing left over for investment and growth.

    • Yep yep! I’m working on increasing my income and decreasing my expenses! All of the extra money will go towards our house payment! 🙂

  16. I love budgets, budgets good four letter word and bad four letter word depending on how much effort you are putting in to budget. I try to make my budget in to a good four letter word (sexy).

    • Your budget must be pretty stylin if you call it sexy! Is it 3D or something? Haha. Well, I guess if you have a budget, you’re far above the curve of the general population. Good for you.

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