At the mere mention of the "B" word – budget – fear and trembling ensue. Say the word and those around you will begin to look at you as if you have a third eye growing out of the middle of your forehead.
For most people, the word budget conjures negative thoughts like limits, restrictions, allowance, surrendering…no fun.
So a new phrase has emerged…spending plan. Sounds so much more pleasant, wouldn't you agree?
Heck, even President Barack Obama used the new phrase when he said, back in February, that a government shutdown could put economic recovery at risk. He made the statement during his weekly radio and Internet address.
But if you put aside the brouhaha surrounding the "B" word, you have to remember that a budget (or spending plan) doesn't limit you. Instead, it gives you freedom. The words "budget," "spending plan" and "freedom" are not mutually exclusive. That is, if you understand what a spending plan can do for you.
Setting up a "B" word or spending plan will give you direction. It's your personal map of how you're going to go from Point A to Point B, financially speaking. It's your guide to paying off your credit card debt, your mortgage, your car or buy a new house. If you don't have a spending plan, you won't know how much you can pay for a house or a car payment. Make this mistake and you'll soon be seeing Mr. Repo Man or Foreclosure Guy. Whether you call it the "B" word or a spending plan, it will give you the freedom to make an informed decision about major purchases.
Remember: a spending plan doesn't limit you. It gives you the freedom to make informed financial decisions, allows you to use your money more wisely and gives you the control you need to achieve your financial goals more quickly and easily.
Call it what you will.