Why Budget and Save? Because There Are No Money Fairies!

It's time to Break It Down!

A few months ago a cousin asked me to blog about the value of budgeting, and its relation to wealth building. While it has taken me three months to get around to it, the topic never fell off my radar. Budgeting and saving are naturally interrelated and should be though of in tandem.

First off, I must begin with the unvarnished truth. For most people, saving alone, no matter how expertly or disciplined, will not create what we have come to think of in this Country as wealth. Let’s be clear, neither Bill Gates, nor Warren Buffett attained their spot in the Multi-Billionaires Club on the power of compound interest. For that matter, neither Henry Louis Gates, nor Jimmy Buffett landed where they are, fueled by interest income either.

But, let me not digress. This is not a discussion about the enterprising nature of the world’s wealthiest, most well-educated, or most musically gifted men; rather it is a brief, direct and simple advisory about steps almost anyone can take to improve their financial prospects for the future. I write, not from the perspective of a financial Guru, or even someone who claims to have it all figured out. These are just practical, common-sense observations and suggestions that have been cultivated by other sources, and that I believe warrant sharing.

America may be the Land of the free, and the home of the brave, but it is not an oasis of free-flowing milk and honey (emphasis on free), or even Universal Health Care. To wit, if you plan to eat regularly, and you want to be prepared for unforeseen catastrophes, be they health-related, or other-sourced, you may need to have budgeted and saved a few coins. It has been said that budgeting is a roadmap. An effective budget, which includes a disciplined savings plan, can ensure that you are able to better manage your expenses, both daily, and long-term.

It should be noted, that in order to devise a comprehensive budget, one must have a handle on regular, recurring expenses. One of the most frequent aversions to instituting and sticking to a budget is it is thought of as constraining confining, and constricting. Quite simply, budgets are often viewed as “Impediments that prevent me from acquiring that thing I want; whatever it might be.” This really is a case of needing an attitude adjustment…or perhaps more appropriately, re-thinking the matter. A more apropos reckoning about budgets is they are “Tools that enable me to acquire that thing I want…when I can afford it.”

That simple recasting of life’s panorama, changes ones outlook, instantly, from a powerless, woe-is-me victim, to, an empowered, in-control, master of your fate and Captain of your soul, man or woman. As New Age as it sounds, that simple transmutation of outlook reshapes both how one views the world, as well as how one is viewed by the world.

Did you ever contemplate why it is that people with money can almost always get a loan, while those who don’t find getting a loan a challenging endeavor? Somewhere in the hierarchy of Capitalism and Free Enterprise, a person charged with the authority/responsibility to make a lending decision is reviewing two loan applications and concluding:

• Person A has demonstrated they know how to budget, save, and manage money. If I approve this loan, based on this person’s history, my investment is likely to be safe, and will probably be returned to me with interest. Therefore, I will approve this loan request.

• Person B has not shown that they know how to manage money. It is clear they need a loan. However, even though I am authorized to approve their loan request, I am also responsible if they default. Therefore, I will not take that risk.

In reality, there is probably more to it than that; but not much more, most of the time, anyway. It behooves you to be Person A, rather than Person B; not just because you would be more likely to get a loan. You may also be less likely to need one in the first place. God bless the child who has his own.

It should be reasonably clear by now why it is important to devise a budget and initiate a savings plan. What could be more important? Sticking to the budget you devised, and the plan you initiated! The only way you reach you desired goals is to maintain, steadfastly, your budget and savings plan. Of course there will be temptations and emergencies. There may even be setbacks resulting from falling off the savings plan wagon. But none of these issues has to be completely disruptive.

The key to winning the ultimate prize, which should be debt-free living, or at least financial independence, is to never lose sight of your budget and savings planning commitment. Emergencies happen; deal with them. Beat back temptation, but when you decide you must yield, try and minimize the damage. In both cases, continue to save some, even if you are unable to set aside your full commitment. This is definitely a case where some is better than none. If you fall off the wagon and stop saving altogether, set a time in the future (the sooner the better) to re-start your plan. Finally, in all three cases, treat the amount you fell behind by as a loan, and make every effort to repay it. After all, you will be re-paying yourself!

The world is a very different place than it was just a few short decades ago. Generations X and Y are better educated, more mobile, and less interested in working on one job, or even in the same career for decades (which is good because jobs are changing more rapidly...or being eliminated). There are many consequences to this dynamic of change. One of the most critical, as it relates to the erstwhile Golden Years of Gen X and Y is the concept of pensions will likely be a thing of the past. They will be like Edsels (definitely a Boomer reference), or typewriters, or home-based telephone landlines; relics all. Pensions will be found only in reference books, or on whatever e-intelligence platform that replaces Google.

The offshoot of that development is it will be even more important to develop a passion and commitment for budgeting and saving. The importance of this endeavor as a stratagem to help prepare for the future cannot be over-emphasized. A catch phrase I heard throughout my career was, “It’s never too late to start saving.” While that notion may have had some truth to it, I would like to revise that sentiment for 21st Century Generations. My advice to you is, “It’s never too early to start saving.” You can bank on that!

So, “Why Budget and Save? Because There Are No Money Fairies!” I’m done; holla back!

Read my blog anytime by clicking the link: http://thesphinxofcharlotte.blogspot.com. A new post is published each Wednesday. For more detailed information on a variety of aspects relating to this post, consult the links below:

http://keep-your-cash.com/budgeting-is-your-roadmap-to-achieve-a-debt-free-life/

http://keep-your-cash.com/the-importance-of-budgeting/

http://keep-your-cash.com/how-to-stick-to-budget/

http://keep-your-cash.com/the-personal-daily-budget/

http://save-money-tips.net/

http://keep-your-cash.com/stick-to-it-to-save/

http://keep-your-cash.com/let-the-bad-press-on-the-economy-work-in-your-favor/

http://keep-your-cash.com/create-a-budget-%e2%80%93-keep-your-financial-house-in-order/

http://keep-your-cash.com/tips-for-buying-a-new-car/

http://keep-your-cash.com/budgeting-on-an-unknown-income/

http://keep-your-cash.com/budgeting-myths-and-reality/

http://keep-your-cash.com/top-six-factors-your-budgeting-success-depends-on/

http://keep-your-cash.com/tips-to-set-up-a-successful-budget/

http://keep-your-cash.com/four-steps-to-create-a-guilt-free-budget/

http://keep-your-cash.com/dont-waste-money-gambling/