Contrary to the belief, budgeting is not as complicated as made out to be. Budgeting is basically a way to organize information that for the most part you already have. The process is to gather the information and organize it in a way that makes it easier to make informed financial decisions. These financial decisions could be how much to save and how to spend your money efficiently.
If done right a budget can show you your financial limits. For most people in financial difficulties, the problems lie in not knowing the state of their finances. If you don’t have a sound understanding of your expenses, then you are fighting an uphill battle to make your income last.
The reason a lot of people think of budgeting is complicated or even a burden is because it is a constant reminder of our finite income. Budgets set a limit on what we can do with our limited income. That’s something people are not fond of; with credit cards, we can be disillusioned into thinking we have greater spending power.
Once we are aware of our financial situation it can be depressing and disappointing. If your financial situation is not where you would like it to be, budgeting can seem a burden and complicated. After all, a budget is supposed to provide you with a realistic view of your finances and force you to make some tough decisions. While budgets are essential to making informed financial decisions, they require effort and discipline on our part and this can make them look complicated.
Entering all the information in a spreadsheet and then analyzing the results can be interpreted as complicated. Budgeting is not something we grow up as a part of our daily lives. What is required on our part is to incorporate it in our daily lives. Allocating our income to different activities from the outset.
Try to remember that it is not budgeting that is complicated but it is our attitude towards it that makes it complicated. Don’t think of budgeting as a burden and embrace it as a tool that will ultimately lead to better financial decisions. Over time budgeting will seem less complicated and more as a vital part of your financial decision-making process.