"A budget is telling your money where to go, instead of wondering where it went." John Maxwell said it first and said it best.
If you want to take control of your cash, there’s only one answer: Make a budget. That means figuring out what’s coming in and what’s going out each and every month—before the month begins.
And it’s not a one-time-only thing. Budgeting is a habit you must form and follow for the rest of your life! During a recent rant on his radio show, Dave explains why your budget is the key to winning with money:
"I’ve been doing this for 25 years, and I’ve helped tens of millions of people get out of debt. The way you do it is a written plan—there is no exception. You cannot outearn disorganization or stupidity."
If you don’t have a plan, you’re living on a prayer. You’re hoping everything is going to be okay, but not actually doing anything about it. That’s not going to work. You have to stop hoping and start planning. In order for the budget to work, you have to live according to your numbers.
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"You don’t spend anything except what’s written down without coming back and adjusting the budget," Dave says. "When you do that, you’ll add a layer of communication to your marriage that will change your marriage for the better. When you do that, you’ll get the stress off of your back."
And when you do that, you’ll start to take control of your life and your money. You’ll feel like you’re finally taming the unruly beast that’s been messing with your money for years. But you have to confront it first!
"You have to look the beast in the face and say, Beast, you’re getting a haircut. Beast, we’re going to pull a couple of your fangs here. Beast, you’re going to get under control. I’m tired of you managing me. I’m going to manage you!"
That may mean increasing your monthly income with a second job or eliminating money-suckers like restaurants and vacations. It may be hard at first, but that’s why you have a plan. Keep following the plan.
When you do, you’ll find the money you need to save $1,000 in your starter emergency fund (Baby Step 1). You’ll find the cash to pay down your debts using the debt snowball method (Baby Step 2). And you’ll eventually find some extra money to give in a radical new way.
"Your generosity factor increases as soon as you take control of your money—as soon as you get the beast off of you. It’s hard to be generous when you’re worried about your own electric bill being paid. It’s hard to be generous when you don’t know if you’ve got the money for food."
But it’s not hard to be generous when you’re in control of your money. Imagine that feeling! And it all starts with a budget. Do it on paper, on purpose before the month begins. Or use our free budget tool EveryDollar if you’d rather make your budget online. It takes all of 10 minutes, and it will change your life—and your stress level—forever.