Budgeting 101 (Part 1)

Budgeting can be scary. Financial burden is a very real obstacle for most people. However, when you take the time to understand what budgeting really is, things stop being scary and those financial trip-ups can become stepping stones toward a more secure life.

So, what is budgeting? Budgeting is the process of managing your money and making it work for you. Simply put, budgeting is the cornerstone of financial planning. More importantly though, budgeting is the central component of life planning.

Budgeting is a process. It’s a busy process that requires careful consideration. It is much more than simply controlling your expenses and saving for the future. It’s less about what you can’t do and more about fully realizing what you want to accomplish in life and then taking the steps to fulfill those life goals.

Think of it this way:

You have goals for yourself, right? Maybe your goal is that you want to build a hospital. How does that goal become a reality? You need to plan!

Maybe you want to travel the world and live in other countries. Perhaps you want to work hard and someday retire. Do you want to start your own business? Do you want to start a family and have children?

You need to plan for yourself!

Anything you want to accomplish or anything you want to have can become a reality, but it must start with a plan that will get you there. Now I’m not saying that you need all the answers because you don’t. My wife and I had no idea how to achieve our dreams when we were first married. We knew we wanted kids and my wife knew that she wanted to focus her time and energy on them. I knew that I wanted to provide a lifestyle that would be conducive to the realization of these goals. We didn’t know how we were going to achieve this. In fact, my wife was making a lot more money than I was making at the time and she was helping me get through school. I didn’t know what I wanted to do, but I knew that whatever it was I wanted to do something big, and I wanted to do it on my own terms.

I wanted more than freedom. I wanted to help build a better future for my family and others. We knew we wanted something special. To us, living on your own terms and building the future that you want was something very, very special. Something that most people will never get to experience.

So how do you plan when you have no idea how to get to your destination? Well, I knew that my wife and I would need to make sacrifices. We also knew that it would be risky, and it would require a lot of work.

So, we planned for that.

Now, here is the ugly truth. If you are not in a financial position to take advantage of opportunities, then it does not matter if you have any. Almost always, opportunities only present themselves when you are ready. This is not because when you have money someone shows up at your door with the opportunity of a lifetime (which is usually the exact opposite of an opportunity). No, it’s because you will see the opportunities because you will be looking for them. It’s like noticing a red car when you’re looking for the red car. Suddenly, you start to see red cars everywhere you look.  If you manage your finances correctly you will start to see how to change them and therein lies the opportunities.