You Need a Budget in 2021

In one of my previous blog posts, I wrote about some ways to close the racial and economic wealth gap. One of the main steps was for the working class to keep their monthly cash flows in check. It is crucial to know what comes in every month, and what goes out. You need to be hyperaware of where every single dollar goes. As Dave Ramsey says, “every dollar needs to have a purpose”. One would think that is common sense, but according to a survey by Debt.com, a whopping 33% of Americans didn’t have a budget in 2019.

“every dollar needs a purpose” — Dave Ramsey

I believe budgeting is the foundation for anyone’s financial situation, and without this proper foundation, the rest can crumble. The hardest part of budgeting is getting things started, but once the ball starts rolling, it becomes second nature. But before anyone can start budgeting, they need to ask themselves a couple of important questions.

First you need to ask “why” you’re budgeting. If you don’t have a good enough reason, you won’t stick to your budget and at the first chance that you get, you’ll break your budget. The main reason anyone should do this is for transparency of information into one’s financial picture, and having that be a tool to help get to financial independence, instead of living in the chaotic paycheck to paycheck lifestyle.

Second, you need to figure out “how” you want to start budgeting. Sometimes we get decision fatigue and stop the process altogether because it’s often overwhelming. There are a lot of resources these days that can help anyone budget without spending too much time on it. At the end of the day, it’s not about how much time you spend budgeting, but about how likely you are to stick to it. If you want to cut the time needed to do this, then by all means please do. There are apps like Personal Capital or Mint that make budgeting seamless by connecting to your financial accounts and importing all the important information into these programs. The only thing you need to do is actually downloading these apps and going through the first setup.

Lastly, this process actually needs to help you save and control your spending. In my opinion, the most important part of budgeting is putting your financial picture in front of you and giving you that “holy shit” moment when you realize where you have been overspending, and how to start saving. It also shows you where you can cut from without cutting into your monthly essentials.

A lot of people think budgeting is a buzzkill, because once you budget, you can’t have fun anymore. However, that couldn’t be more false. Did you know you can even budget for fun? yup, that’s how you entertain yourself responsibly.

budgeting doesn’t need to be a pain in the ass

Look, budgeting doesn’t need to be a pain in the ass, it’s actually supposed to make life easier so you don’t worry about your finances. Once you realize that, you’ll actually enjoy the feeling of being financially stress-free. Therefore, start the process as soon as possible so you start 2021 off on the right foot!

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