Why Budget II
Rising Fuel Cost has wiped out my budget!
Not really, but:
Some people just can’t answer the question of why budget.
Today’s world just gives us another reason for why budget. The cost of fuel here in the United States is skyrocketing, food costs are on the rise and every time we turn around, it seems like everything just costs more. It appears that everything is going up, except my income. I’m sure that if you’re like me, your income is pretty well stable. You might get an annual cost of living raise, but that seems to just put us way behind the curve of rising prices. Everything we buy seems to be going up on a weekly basis while income goes up on an annual basis, at best. What can one do?
If you have taken the time to really understand why you budget, done the work to establish the budget, and are trying to live by that budget, you understand what must be done. Those of us who live on a budget realize that a budget is a means to an end not an end in itself. We understand that circumstances change. We understand that our budget must be able to adapt to new situations that we are faced with or new goals that we establish. A budget is a fluid living thing and is not cast in stone without the possibility of change.
Hopefully our budget was constructed with enough foresight and in a manner that we will have the means to counteract these rising prices. Hopefully, we made allowances for a bit of a fluctuation in our expenses. If we made enough allowance, we can weather these rising prices until our income catches up. Hopefully that is the situation that you are faced with.
On the other hand, if you did not build in enough allowance and your expenses are still exceeding your allowances, you only have three options. They may not be what you want to hear or do, but remember, a budget must make allowances for changing circumstances. Things are certainly changing now so we must change also.
Your first option is to make more money thereby increasing your income. If you have the ability or capability to make more money to cover your expenses, that would be the ideal way to cover current shortfalls. Simply increase your income and assign that income to areas of expense that have increased. All of us could probably do more to maintain the lifestyle that we have achieved, after all that is what we work for.
If you can’t increase your income, then you can consider cutting your expenses. To do a good job of cutting expenses, you must know where your money is going. Your budget should be able to let you see in what areas you might choose to reduce expenses. This could be a tough decision. It may mean that your lifestyle is going to change. Nobody likes to see their lifestyle less than what it was previously. Bite the bullet and make the tough decisions.
Your only other option is to go into debt. I hope this is not the alternative that you accept. If this is what you decide to do, it must be, for your long term peace of mind, just a short-term solution. You must come to the acceptance that you are either going to have to increase your income or decrease your spending. Remember that a budget can not be static. It must be fluid and changeable to meet your every day life. Debt should be very closely controlled and limited to very high cost items.
A budget is for living and will change with your life. If you don’t have a budget, you really need to start preparing one now if you want to control your financial life. This article is just another answer to the question of why budget.