Why Budget When Our Expenses Exceed Our Income?by Brian B.
It is better to know how much I’m overspending than to "hope" I’m not spending too much.
We can ignore the fact that we overspend every month and go about our daily life hoping that we’ll forget about it all within a few of days. We’ll have to face this issue one day. Why not do it today? Why not right now?
On the other hand, we can choose to be in control of our finances. Now, we don’t need to go all crazy about it and go through all our finances and plan where every single earned penny will go.
How about we take it easy and take one step at a time. Ready to go?
- May I suggest downloading WellSpent as our first step. You can also track our budgets and expenses on paper if we prefer to do so. The point is that we need to be able to keep track of our expenses on the go.
- Now let’s create budgets with the amount of money we think we use in each of our spending categories. Some of the categories we could have are the following: groceries, eating out, clothes, crafts, fun money, etc. I wouldn’t worry about categorizing every penny of our income just yet. We’ll get there soon enough.
- This is the toughest step because it will require a little bit of discipline. For the next month or two, we’ll document every transaction we make for each of the budgets we created in the previous step. If you find yourself lacking motivation or you need an extra boost of inspiration for this step be sure to check our Facebook page, Twitter feed, or our Google Plus group. We post budget-related articles, quotes, among other things on a weekly basis.
Just to be clear, this is by no means a bullet proof way to ensure we won’t spend more money than we make. This is simply an exercise that will help us see more closely where our money is going at any point in time.
As a bonus, doing this will also help us see our spending habits more clearly so we can better keep our money WellSpent!
We’ll see that as we keep a record of our expenses, we will be more inclined to spend our money wisely. That is precisely what happened to my family and I.
I love using WellSpent to track my expenses and to help me stay within my budgets because doing so puts me in control, even when I overspend. I get to choose how much I overspend by. We'll go over the things we can do when we choose to overspend in another article.
In summary, why should we have a budget even when our expenses are greater than our income? Because, doing so will help us be in control of our finances. We’ll know exactly where our money is going and how close we are from closing the gap between our expenses and our income.