Everyone is always looking for the next financial advice tip, the best way to get rich, or in this economy, a new way to save, but often times when you start to use the B-Word they quickly start coming up with excuses…  “Budget’s don’t work for me, they’re not flexible enough.”  “I don’t have time to budget, or I don’t know how.  I’ll budget when I’m older.”

All these excuses however, while they may even be true, just keep you from reaching your financial goals, and consequently, many of your other goals as well.

One of the crucial components of a think forward, work backward life strategy, is the ability to visualize your ideal “end state” in any situation, and develop a plan to achieve it.  A budget is exactly that, with regards to your financial future.

While many of you may already budget to some extent, it is such an important part of living a deliberate life that it’s worth discussing.

Contrary to what you may be thinking, a simple personal/family budget does not take a significant amount of time (my wife and I spend a few hours a month working on it), doesn’t require special skills or accounting knowledge, and gives you all the flexibility you want, without any of the guilt associated with spending.  While you may currently feel guilty eating out, shopping, or buying other things you “want” but don’t “need”, now you can simply budget for those items, and gladly purchase them according to the amount budgeted.  A budget in and of itself is merely a plan for where each dollar will be spent based upon your priorities, nothing more.  One of the side effects of the increased transparency into your spending may be that you decide to revise your spending habits to bring them more inline with your short and long term priorities, but who wouldn’t want more control over their money, to ensure it gets spent on the things they value most!

There are as several varying theories on budgeting, each with a different emphasis, but regardless of the theory you subscribe to, there is always one resounding theme.  Just do it.  After you get started you can revise and modify your budgeting strategy based upon what works best for you, but waiting to start is the worst strategy of them all.

My budgeting strategy has been modified and refined as I use it, and continue to research other techniques and ideas.  Some of the more recent authors I’ve researched, and would recommend are below.

Dave Ramsey is a Christian radio and tv financial talk show host, and popular author and speaker.  His advice is immediately applicable and easy to follow.  He breaks things down into easy to understand lessons, and explains many more complicated topics including retirement investing, real estate, and insurance.  He is largely focused on getting out of debt, so if you are already mostly debt free his show won’t apply as much, but his examples can greatly help you get started with budgeting.

David Bach is best known for his book Smart Women Finish Rich but he has since written many other books including Smart Couples Finish Rich and various others.  He also has a practical approach to financial planning, but one of the most important things he brings into his financial planning advice is what he calls a “Value Circle”.  It is intended to allow you to determine what you value most, and ensure that your budget and financial plan are inline with those values.

Ramit Sethi is a popular financial blogger, and author of I Will Teach You to be Rich.  He has a very direct approach to saving money, budgeting, and becoming wealthy, but has some great advice throughout the book and on his blog to add to your daily lifestyle to ensure that you are setup for success in the future.

Convinced?  In my next few posts I will be providing more details regarding how to get started with a budget, as well as a sample budget template for you to use to get started, followed by a discussion on maintaining and adjusting your budget going forward.

Do you have any good budgeting tips or stories to share with me and others?  Please leave a comment below so we can all benefit from your experiences.

TFWB Action Plan:

1. Decide you want to control your money and have the ability to direct it to of your priorities, instead of wondering where it went each month.
2. Research some of the above resources, or others, to begin to learn more about the budgeting process.
3. Check back soon for additional information and resources to get started

Photo by Steve Wampler