The Freedom and fun! of Life on a Budget

By Sally Herigstad      

Budgets often bring up feelings of deprivation, tedious bookkeeping and no fun ever again. But almost any financial expert will tell you they can actually give you more freedom. Without a budget, money just slips away. We spend until we run out, or we don’t spend because we’re scared to. Either way, we’re not making the most of our money—or having as much fun as we should.

With a good budget, you don’t feel guilty spending money. You plan in advance and you know what you can afford. You can have a dining out budget of $200 a month, for example. When someone says, "Let’s try that new bistro," you can go out guilt free as long as there’s plenty left in that part of your budget. Without a budget, you might spend the entire meal worrying about the bill, instead of enjoying the food and the company.

Now, what if you want to join the gym, but there’s nothing in the budget? You prioritize. Can you cut back on eating out, or do without cable? You are in control. Feeling inspired to create a budget of your own? Here are a few guidelines.

Good budgets are:

Flexible. You should be able to swap one expenditure for another if you want.

Easy to maintain. Personal finance software, like MSN Money or Quicken, can help.

Realistic. There always will be unexpected expenses like car repairs or baby showers, so plan for them. A rigid budget is like a strict diet—and about as likely to last past lunchtime.

Whether you’re doing great financially or living paycheck-to-paycheck, you can benefit from—and in fact feel richer and freer because of—a well-designed and implemented budget! Download a free, downloadable budget in Microsoft Office Excel at http://sallyherigstad.com/template/budget.