My two year old son sings a mean ABC song. He has the melody down and has nearly nailed every letter up to V. While the l-m-n-o-p combination is still a bit muffled, he is making progress. The alphabet is the cornerstone of our learning process. Once the boy masters the alphabet, we’ll move on the words, followed by sentences, and then…hello books! Likewise, a budget represents the foundation of any journey out of debt. Just as we learned to apply the alphabet, one must also develop the skills necessary to budget effectively.
Many of us were not taught how to manage our money in ways that lead to wealth creation. Additionally, debt has been so aggressively marketed, that living with debt seems normal. The Debt Free Divas believe that through education people can learn to make better informed decisions with their money. Let’s say you’ve experienced a money mishap. You’re in a pickle. What do you do?
A budget is the most important tool in your financial toolbox. We have many euphemisms for the word budget…spending plan, roadmap, etc…ideally to soften the concept and make it more palatable. I prefer plain old budget. Let’s remove any negativity associated with that term. The budget is no longer a source of restriction, or some tedious, mundane chore. A budget is your first stop on the road to financial freedom. The Debt Free Divas have a simple technique to help you begin. It’s called the ABC’s of budgeting.
- A – Account for all of your income. List every source of money coming in.
- B – Be specific about every expense. Write down everyone and thing with their hand in your pocket or pocketbook.
- C – Commit to doing your budget each and every month.
Creating a budget is the easiest way to give yourself a raise without getting a second job. With a budget in place, you’ll have a snapshot of your current financial situation.
Don’t fret if the initial attempts are less than fabulous. Just keep making progress. Once you master the ABC’s of budgeting, you can craft a plan to dump debt. Do you have a surplus that can be used to eliminate debt or are you operating like the federal government – by deficit spending. Either way, completing your budget on at least a monthly basis will help you make better decisions with your money.
We have a great list of free, online options for creating and managing your budget. Are you ready to apply the ABC’s to budgeting?
“When you know better, you can do better.” ~ Maya Angelou