• Theresa Gray

Maximize Your Monthly Income Part 2: Budgeting

Have you ever gotten an unexpected check in the mail? Let’s say it was for $50. It’s exciting to get surprise money You might think, “I’m going out to dinner, I have $50”, and “I’m getting a new shirt, I have $50”, and “I can afford tickets to the concert, I have $50.” Do you see the problem?

Those thoughts weren’t dinner or shirt or concert. It was dinner and shirt and concert. You got a surprise $50 but actually spent $150, so you actually got a surprise hit for -$100. Extra money like that disappears pretty easily!

In a previous post, 3 Easy Steps to Maximize Your Monthly Income, I talked about how making more money isn't the solution to your money problems. Yes, it is great to get a raise and everyone loves getting handed a bag of money - but if you don’t budget the spending it’s gone before you

know it.

making more money isn't the answer

Budgeting is the only way to keep from overspending!

But, since we aren’t often taught personal finance, most of us don’t know how to budget. In fact, in a recent survey (1) of millennials (age 18-34) only 18% had a household budget.

And, credit card debt has been increasing since 2012! (2)

So, I think it is fair to assume that if you don’t have a budget, you spend more than you should. I wrote about our realization of the importance of budgeting in, How Dave Ramsey’s Financial Peace University Changed My Life. We were spending more than we made until we started to budget.

It took a lot of work, but together we made a budget and stopped overspending. After sticking to the budget we were able to pay off