Before we even get to the “how-tos” let’s talk about the “whys” of budgeting. A lot of people feel like budgets are these restrictive punishments telling them how they have to spend their money.

I personally see a budget as a way is to give you control over your money and the ability to make the choice where it goes, rather than just leaving it to chance.

A budget is where you plan what happens to your money. Yes, some of it has to go to necessities: food, rent, gas (and I would argue retirement and healthcare go here). But if you have a budget, you also get to plan what to do with what’s left. You get to dream, to set goals, and to plan your own life.

• Do you want to travel? Plan on the extra going to a small travel budget.
• Do you want to pay off all your debt? Plan on the extra going towards that?
• Do you want to save for a house? College? A new car? Then funnel your excess that way.
• Do you want to ??? anything??? This is where you get to decide.

But until you know what you are spending on necessities, and you don’t even know how much is really left, you can’t start to put your mind to what to do with the rest.

And, if you’re like 20% of Americans, you don’t have a budget at all. You don’t know what’s coming in, where it’s going or where you’re leaking money. That’s why you budget.

So that you have control over your own money – and YOU get to decide where it goes.