I’ve talked about “the budget” in previous posts, but up until now I have not shared anything online. I’m a little surprised too, because I really believe it is a key tool for achieving our goals and dreams. From the very beginning of our life together we have created a budget and tried our best to live within it. It’s not perfect. It will need adjustments over time. But having something IS better than nothing.
Everyone needs a budget!
I don’t care where you sit on the income scale, you need a budget. If you have limited financial resources, a budget is an important tool to make sure you don’t spend those hard-earned dollars on the wrong things. And if you’re a millionaire, having a budget will help you to stay a millionaire.
One of our goals is to save and invest as much as we can while we’re young. A budget helps us to prioritize that goal and also balance it with our day-to-day living expenses. I use the word “balance” because we have a lot of choices available to us.
We could choose to save ALL of our income, but that wouldn’t leave any money for housing expenses, electricity, water, etc. Or we could choose to spend ALL of our income on dining out, new clothes, sporting events, and vacations. But that wouldn’t leave any money for savings. It takes “balance” between all of these things. A budget gives us that power and gives us that control.
I like the way Dave Ramsey puts it — a budget is “giving every dollar a name”. You should know how much you are going to get paid each month. So a budget is choosing how to spend that money ahead of time.
Our Very First Budget
Before I show you our current budget, let me share our very first budget that we used starting in June 2005. I’ll warn you that it’s pretty rough looking and not very good on the eyes. But hey, it was a good attempt! I had started it from scratch in Microsoft Excel and tried to organize it in a way that made sense. I also did my best to think through all the categories of spending we might encounter. There are housing expenses, auto expenses…
Note From Author
The full “Our Budget Revealed” post has been back-dated to 02/10/2006. But it was originally published to the Financial Independence Champion (FIChampion.com) Blog on 07/23/2016.
Why Back-Date Posts?
I mentioned in my first post how this blog will be a little different than any other ones you may follow. I still plan to talk about personal finance, rental property, travel, and the pursuit of financial independence. But to give all these topics the right context and the full picture, I need to start at the beginning. I need to fill in the details of life from 2005 until now. I want you to see the successes, the struggles, and all the milestones we passed along the way. Therefore most of the “new” content will be back-dated to their appropriate dates in 2005, 2006, and beyond — until we’re caught up!