budget

A budget is just a plan for your money; what you expect to come in and where you’ll spend it. It is forward looking, you’re setting up a framework for yourself to guide your spending in the months and years ahead. That plan for your money reflects your priorities – you work hard to make money so where you spend it should matter too. It can be very detailed: some people plan for every dollar spent and don’t leave anything in doubt. It can also be more general with some flexibility on where money is spent within certain broad categories. As your goals and priorities in life change, your budget should also change to reflect that. The important thing is that you’re thinking about what goes out and what comes in and making sure the first number (your spending) isn’t more than the second number (your income). Your budget is all about choices and prioritizing; are you spending your money where you get the most value and in a way that supports your goals? Are your spending habits keeping you from saving and investing in your future? A budget is the best way to make sure you know the answer to these questions and stay on track month to month.