{"id":1669,"date":"2008-03-10T05:00:32","date_gmt":"2008-03-10T13:00:32","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/2008\/03\/10\/budgeting-the-most-important-thing-you-can-do-with-your-money\/"},"modified":"2023-09-28T15:33:03","modified_gmt":"2023-09-28T21:33:03","slug":"budgeting-the-most-important-thing-you-can-do-with-your-money","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/budgeting-the-most-important-thing-you-can-do-with-your-money\/","title":{"rendered":"Budgeting: The most important thing you can do with your money"},"content":{"rendered":"

This article was written by Joshua Timberman<\/b>, whose passion for personal finance started after reading Dave Ramsey’s The Total Money Makeover<\/a><\/b>. He became debt-free in November. He is the Financial Peace University<\/a> coordinator at his church, and is an active participant at Get Rich Slowly and other personal finance blogs.<\/i><\/p>\n

The most important thing to do with your money is to give it a plan. A budget. A spending plan<\/a>. A cash-flow plan. Call it what you will, but having a plan for how you spend money will set you free to actually enjoy it.<\/p>\n

Managing Money and Impulses\"\"<\/h2>\n

Everyone who has any kind of income needs a budget. Successful companies and governments manage their money with budgets. Even un<\/i>successful companies and governments do budgets (though it can be argued they don’t have the right approach). To get ahead with money, you need to manage it. And that is what a budget really is: Money management, on purpose, written down.<\/p>\n

If you don’t write down how you’re going to spend the money you make, it will walk out the door on impulsive purchases. This leads to spending more than you can make, and leads to bad money habits like “90-days, same as cash” financing on stupid things, or ridiculous car loans because you had that new-car itch<\/a>.<\/p>\n

I plan my impulses. I build into my budget a set amount of money that I can spend on whatever I want without guilt. This is a relatively small amount \u2014 usually $100 per month \u2014 but the important thing is that I’m doing it on purpose<\/i>, and not letting my impulsiveness get the better of me. I’ve been doing this for three years now, so I have some practice, but I didn’t start with a lot of experience, and it didn’t work for a few months, but things came together eventually.<\/p>\n

<\/span>The Cash-Flow Planning Method<\/span><\/h2>\n

Making a budget work takes effort. I won’t hide that fact. Experts talk about different methods. Some will say use theirs, and others will say use whatever works. I will share the method I use. I recommend it because after trying several others, this works the best for me and my wife, and for the people I have worked with through Dave Ramsey’s Financial Peace University at our church. Dave’s idea is very simple.<\/p>\n