Food For Thought Friday: The Importance of Budgeting

Budgeting is something that is extremely important when it comes to handling money. Most people don't do it though. This article gives a quick overview of why you should give it a try.

Why You Don't Budget

Have you ever looked at your monthly bank statement and wondered how you were able to spend  $2000 on a $1700 income? Or have you ever looked at your paystub in December and was amazed at the amount of money that you had accumulated over the past 12 months? For five seconds you felt like Bill Gates until you came back to reality with the question of, where exactly did all that money go? You blame taxes. You blame bills. You blame car problems. You blame everything you can possibly blame except one thing, yourself. You’re the reason why you spend more than you make. You’re the reason why you never know where your money goes. This can all change by adding one particular practice to your everyday life—budgeting.


Budgeting can be a scary word for a lot of people. I know in the past when I would hear anything about budgeting, the words: stress, stress, and more stress, would instantly fill my mind. Nightmares of Accounting 201, Accounting 202, and Finance 323 would also fill my mind. I used to think it was for cheap crazy people like Julius off of Everybody Hates Chris. I wanted no part of it. It wasn’t until my mom gave me Dave Ramsey’s Complete Guide to Money, when I finally opened myself up to learning about budgeting. That book really changed my life. I never thought I was that bad with my money, but that book really exposed me. The book focuses on an array of money topics like: investing, 401ks, paying off debt, mortgages, etc. One of the main topics that really caught my eye was budgeting. With me not having a full-time job or owning a home at that time, budgeting was one of the few things that I could actually apply to my life from that book. So what exactly is it and why is it so important?

Budgeting 101

Budgeting is basically telling your money where you would like it to go before you actually receive it. When I first started budgeting I found it to be challenging; mainly because I didn’t really know how much my paychecks were gonna be. I was still only working a part-time job so my checks would always fluctuate. Now that I am full-time it’s a lot easier because I’m getting a steady income every two weeks. You plan your budget out each month before the month begins and put every dollar that you are expected to make in a specific category. Doing this is important because you’ll finally be able to have control over your money. So if your expected income for the month of February is gonna be $2000, all of that money must be assigned to a category. A category can be: groceries, gym membership, cable bill, savings, movies, clothing, restaurants, etc. You just have to make sure every single dollar that you earn for that month is allocated for. Each month is gonna be different though. Valentine’s Day is coming next month and you wanna be able to take your girl out to a fancy restaurant. You should make that a category for your February budget and write $100 (or $500 if you’re balling like that). Since a large portion of your money will be going to that specific day, you should lower the amount of spending for another category like clothing or fast food restaurants (so you won’t go over your budget). Here’s an example of how part of my budget looks like:

After budgeting for a couple months I found out that making a budget wasn’t really the hard part—being disciplined about your budget was. If you only have $5.93 left in your restaurant spending, then going to Longhorn Steakhouse should be out the picture. The thing is, your mind isn’t yet trained to think like that. You’re so used to checking your bank account and seeing that you still have $435 left to spend. You forget that the $435 is supposed to be going towards your student loans and gas for your car.  Just like the person that’s trying to lose weight has to be disciplined with what they allow to go in their body, you too must be that way when it comes following your budget.  

Give Budgeting A Try

Budgeting isn’t an easy skill by far. It’s not all that exciting either. I myself have struggled with it on and off over the past year, but have finally started to become more consistent with it. I’m really seeing the importance of it and have managed to save a lot of money in the process. Even though it can be a hassle at times, budgeting is way more stress free than it was in the past. Back in the day you had to use: pen, paper, Excel spreadsheets, calculations by hand, etc. Now we have budgeting apps like EveryDollar, YNAB, and Mint, which cuts the budgeting process down by a lot. I personally use EveryDollar (a Dave Ramsey budgeting tool), but I have heard excellent reviews for YNAB (You Need A Budget). I will encourage you to download one of these apps and give budgeting a try. Don’t get worked up if it doesn’t work for you during the first few months. It usually takes a few months to get the hang of it. If you remain disciplined with it you will begin to see a huge impact over your money. Chew on that as you enjoy your weekend.

Read Part II Food For Thought Friday: The Importance of Budgeting Part II

Evan Xavier
Always cheesing for absolutely no reason 😁

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