Welcome to the ABCs of Savings! Each day we’ll be discussing another money saving topic, each beginning with a different letter of the alphabet. Be sure to subscribe via RSS or email so you don’t miss any steps along the way. You can read the full alphabet of posts here (updated as they are posted).

B: Budget

It’s that dreaded B word…. Budget. While it may not be glamorous, it’s a HUGE piece of the saving puzzle. I used to think that a budget had to be done on a color-coded spreadsheet. It was an overwhelming task that I certainly couldn’t tackle.

Once we took Financial Peace University, we realized that a budget is simply telling your money where it should go. It’s a seat belt, not a shackle. It’s a way for you to see where you need to spend money and where you need to hold off. It can be done on a sheet of notebook paper or on a fancy spreadsheet. It doesn’t really matter how you do it… as long as you do.

The biggest benefits of budgeting each month?

• Communication: Talking through the monthly budget with your spouse allows you to talk about upcoming events, ponder possible purchases, and discuss financial matters from different perspectives.
• Planning for the Unexpected: Budgeting allows you to know how much money you have left over each month. Once you know how much you have to work with, you can put that extra to work. You can save for emergencies and be prepared when life happens.
• Getting the Big Picture: If you don’t know what’s coming in and going out, you can wander through life just getting by. If you have a plan, you know what to do. It’s much more rewarding to make purposeful purchases than it is to nickel and dime away the money and then wonder where it went.

Just keep in mind that the budget isn’t meant to keep you from having fun. The beauty of a budget is that YOU are in charge. You decide where the money gets spent. You get to carry it out and make adjustments along the way.

If you’re interested in learning more about budgeting, check out my Build a Better Budget series. You’ll find information about communication, using cash envelopes, and more!

So are you budgeting? If you are, do you use the good old-fashioned paper and pencil method, or are you making technology work for you?