My Journey out of Debt

Featured customers currently enrolled in a CareOne Debt Relief Plan, share journey to become debt-free; hear how they juggle family, finances, and more.

Mastering my Budget Post Debt

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Mastering my Budget Post DebtThis is a topic that is very intriguing because I believe I may never master my budget in my lifetime. The sheer attempt to master my personal financial budget may be the biggest undertaking in my lifetime. I agree a budget is very important in my daily, weekly, monthly, and yearly planning. However, I must admit, creating a budget and being able to stick to the letter (in this case, the number) of the law within it, is extremely difficult.

Budgets are footprints that give me a substantial and concrete idea of where I want to be at any given point in time with my finances. I consider it the foundation that lies under every conceivable financial decision opportunity. This current economy and the ongoing fiscal cliff controversy make it very hard to abide by the tenets of the budget all the time. I guess the significant point in this blog is that I know what my budget goals are and I am striding in that direction.

However, I am not able to say I am "mastering" my budget. The mere thought of one or two unexpected emergencies could throw a person off track. Fortunately, my last small emergency did not throw me off track since I was able to respond with the necessary monies to rectify the problem. For some people in this country that ability is still far away from reality. Mastering a budget is an abstract concept that I love to pursue because it means I am striving for perfection in an imperfect world. It is a carrot in front of me that I may never obtain but the mere attempt does provide understanding of "financial security" that I would probably not reach without a sound budget. 

A budget is a dynamic between abstract forecasts of future earnings versus known expenses. One major variable in the scenario is unexpected emergencies that may arise. Certified Financial Planners tend to encourage their clients to set up a "Rainy Day Fund" for those unforeseen emergencies. A "Rainy Day Fund" is usually comprised of three to six months of take home pay isolated from everyday savings vehicles and checking accounts. It is earmarked specifically for unforeseen emergencies. Typically this is considered within the cash reserve quadrant of the financial planning matrix.

Budgets allow me to analyze my current status and if necessary, adjust to my financial needs whenever the landscape changes. I am a strong believer in budgets simply because I have always liked structure. Budgets is a part of the framework that others tend to take for granted until some life changing event forces them to examine their personal financial situation.

In addition, I have come up with a succinct analogy regarding budgeting and financial wellness. If I think of my financial wellness as embarking on a long distance trip over the course of my professional working lifetime, I understand that budgets act as a roadmap to keep me on the most fuel efficient trip possible. With the exceptions of an occasional blowout, I can navigate to my destination of financial wellness in a more cost effective and safer manner. This is the thing that provides me with personal comfort. I may not love my budget all the time but I am assured that I am moving toward my desired destination. Having the confidence in knowing that I have mitigated potential catastrophic accidents in advance is a wonderful byproduct to receive.

Budgets provide hard numbers in monitoring and achieving a financial goal, whether it be a capital accumulation goal, retirement planning, estate planning, etc. As we listen and participate in the budgeting process on some level, whether at work or at home, it has become very clear to me that budgeting is an invaluable tool. It is very important to understand and remember there is no Pass/Fail scenario when it comes to having a budget. It is simply a win-win situation.   

Joe Thompson, Debt management plan graduate and blogger for CareOne Debt Relief ServicesJoseph Thompson

Joe Thompson has been a Debt Management Plan (DMP) customer with CareOne Debt Relief Services since September 2008 and recently graduated to become debt-free!! Joe Thompson is active in many non-profit areas including; acting as Site Director for I.S. 8 NIKE Youth Basketball and has served as a mentor to many young inner city youths. As a hobby, Joe is a high school and college basketball referee in the New Jersey tri state area. Having officially completed the Debt Management Plan, Joe Thompson is excited to share what his experience on the DMP was like as well as what made his experience a successful one. Look for more posts under the My Journey out of Debt blog. Compensated CareOne Debt Relief Services Blogger.

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  • The thing about a budget is that it has to be ever changing, fluid, and flexible.  I agree that you cannot "master" or "perfect" a budget.  Just when you think you have, life changes, and you have to change with it.  But the good news is, your finances are a lot like your health....consistency is the key.  You don't have to be perfect, but as long as a person is consistent with paying attention to your expenses, income, and spending - you'll be just fine.  :)

  • An even look towards your finance is today’s necessity, while having the ability of managing it smartly. The persons who are elegantly managing their finance are least bothered with their future or any emergent circumstance as they have added more towards their savings. Well planned budgets are also quite helpful as expenses would be cut off and a straight focus would be on the necessity.

  • Financial matters should not be taken leniently as one has to be well informed and acquire thorough knowledge coz it’s all about your hard earned money. I would rather like to express my views for the people who are a bit careless and now being drowned into debt. The process of managing finance starts from our home itself while planning our budgets; we curtail the expenses which are not necessary just to add some more cash. Well this should be the tendency in everyone if you really want to enjoy your life being debt free.

  • Very interesting article. It is very hard to achieve financial wellness without proper budget planning.

  • It is very hard to manage your budget when you have unstable or very low income sources. So instead of saving money it might be better to focus on earning more. Though is some cases you have to borrow to cover  short term budget gaps.

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