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Mention the word “budget” in a crowd and someone will run. Surprisingly, others will stay and talk about how they have benefited from putting their finances on a budget. Like many other elements of personal finances, budgeting is a tool to help improve the quality of our lives.
According to budgeting guru Dave Ramsey, a budget is simply a plan in which spending is put on paper – intentionally – before it is actually spent. CNN’s budget experts refer to budgets as “a necessary evil.” Both descriptions are true. However, there are ways to make a budget less intimidating and painless.
While many people still prefer to prepare and manage a budget on paper, there are a number of good budgeting software programs, off and online, to make the process easier. Quicken and Microsoft Money are both widely used software programs that go beyond helping to create and manage a budget by letting users to link up to their bank and investment accounts. This feature is particularly useful at tax time.
There are several other budgeting tips that make budgeting more useful and efficient. One of the hardest – and most important – decisions in keeping a budget is separating needs from wants. Needs are the necessities – the expenses that have to be included in a budget. Wants, on the other hand, are the extras – the items we want to spend money on. There is a simple question to ask – is it a want or a need? It is intersting that when a considered expense is examined in that light, it becomes a need.
Budgeting requires discipline – and gives rewards.