We all know life will not go exactly as planned. The unexpected will happen at the most inconvenient time. Murphy’s Law always occurs when we are ill prepared. When making out your budget each month, know things will not go exactly as planned. These unexpected expenses will seem to come less frequently when you are prepared. By making sure you have a fully funded emergency fund (3-6 months of non-discretionary expenses) along with another savings account, the minor and major unexpected expenses do not derail your financial plan.
A budget is a tool that can strengthen your greatest wealth building tool – your income. John Maxwell says that a budget is “simply telling your money where to go instead of wondering where it went.” With a sluggish and slow economic recovery, it is more important than ever to know where every single dollar goes. By planning how your money will be spent each month, you can begin to get out of debt and strength your financial position.
Many of us wish that we had more money. We may dream it. We may wish for it. We may work harder and longer for it.