A Budget is a Beautiful Thing

"If you fail to plan, you are planning to fail!” Benjamin Franklin

A budget is a breakdown of incoming and outgoing money, or, expenses and income. The purpose of a budget is to provide a clear view and understanding your current financial status. A budget is also an important and essential tool in achieving financial health and wellness. Think of a budget as an effective and easy-to-manage plan of where and how your money will be spent over a specific period of time (weekly, monthly or yearly). It allows you to keep track of your spending and can help to determine where changes, if any, can be made in your spending habits.

Without awareness of your financial situation, you risk an imbalance between what you earn and what you spend. This leads to debt, and debt can unfortunately quickly spiral out of control. The saying, “Failing to plan is planning to fail” comes to mind. Creating and maintaining a budget is the simplest and easiest way to gain control of your financial health.

Why have a budget?
A budget becomes a spending plan that creates awareness of your financial situation.

A budget increases your awareness of the amount of money coming in and the amount of money going out in your personal economy. It is easy to lose track of what you’re spending when using bank cards, credit cards or a phone to make purchases.

By keeping track of what you spend your money on it is easier to prioritize. Most of us have fixed expenses such as rent, a car payment, insurance payments, and utility bills. You can use a budget to first allocate money to fixed expenses, then, gain a better understanding of what money remains to spend on non-fixed items such as entertainment or clothing. Your spending plan can help to differentiate between what you need and what you want.

A budget can help to minimize debt. If possible make space in your budget to save for unexpected costs such as car or home repairs. Most banks and credit unions offer accounts high interest savings accounts. Review savings accounts here.

Warning Signs
Reviewing and maintaining your budget provides an opportunity to notice when or where a potential issue might arise.

Who should have a budget?
Everyone should create and use a budget.

How to make a budget

  1. Compile information on your incoming and outgoing money. This includes your income (pay stubs) and your expenses (bills and receipts).

  2. Once you have gathered the information, enter that info where you can track and edit as needed. There are several different kinds of spreadsheets available. You can use MS Excel for a DIY budget, or, you can use a software app.

  3. Revisit your budget on a regular basis, updating and changing if needed.

If you are comfortable using an app, we’ve created a list of our favorite budgeting apps :

Budgeting Apps

Make note that a budget is simply a plan, it is not judgement on where you are financially. Most people need help to manage money effectively, and, it is smart to make use of the tools that are readily available to you.
If you have any questions about budgets, send us an email. We’d love to hear what you think.

Terms Used


Expenses are any money spent within the timeframe of your budget. Examples include cable, rent, gas or electric bill, car payment, house or life insurance, concert tickets and meals in a restaurant.


Income is the amount of money earned within the timeframe of your budget. Examples include your paycheck, tips received if you’re in the hospitality industry, spousal and or child support payments.