Budgeting has been taught in so many levels and approached using different strategies by a lot people. This have led to numerous beliefs and ideologies on budgeting. But the idea is still the same, ensuring that the money we have works for us in the long run. It was once said that enjoying the fruits and the shade of the tree today is because someone had the foresight to plant the seed a long time ago. Budgeting can help a person down the road if done properly today.
There are a couple of ways of looking at budgeting so we can be motivated to start. As soon as you see the value it brings not only in your day to day routine but in your future as well, budgeting will be a easier to accept and execute. There are those that feel strongly against it because some does not know how to go about it and some people feel they do not have enough money. But it is easier if we remember that budgeting does not give us more money than we already have at present, it protects what we have so it can last longer. The benefits of budgeting will be felt in the future.
Budgeting talk with a game developer
Csmonitor.com recently came out with story about budgeting. The idea is to pick the brains of different people from different walks of life about budgeting. It helps enlighten how people look at the topic and how they approach it. It can help people who are still trying to contemplate about budgeting or those who wants to check if they are doing the right thing.
A game developer was interviewed about his thoughts on budgeting these are great takeaways from the discussion and his thoughts in the topic:
Knowing where you stand
There are some people who doesn’t even know what stage in life they are in in terms of finances. Knowing your main source of income is important in establishing that fact. If you hold several jobs, know what your bread and butter is so you can prioritize accordingly. Know what is important so you can protect your income.
The game developer was confident and sure about his job as a game systems designer. He knew what he was doing and knows how he got to that point in his life. When asked if he wanted to do something else, his answer was an absolute no. He knew what he had and he knows the value of the job he currently holds.
Source of income
Budgeting requires being on top of your finances. This means knowing how much money is coming in and how much is coming out. The game designer knew exactly how much he was making which is an important factor in the budget process. The surprising thing about the income is not the amount but his security.
It is inherent in a lot of people to want more. But that attitude will not bring satisfaction thinking the grass is always greener on the other side of the fence. You need to feel secure on what you are getting to see the value of your income and what it can bring to your future.
It is a reality that a lot of people are in debt and learning to accept that you are in one is a good step in managing your finances. Budgeting can help straighten out the way you handle your resources today so you can stretch it out further down the line. There are even ways to foolproof your budget plan.
Knowing the good ones from bad ones also help paint a clearer picture of your financial standing. In his case, the game developer knew that though he is still paying for student loans and that it makes up the bulk of his debt, it was worth it. In his eyes, it is a good debt because it helped him get to where he is at present.
He also understood that his credit card debt is something that can be improved. We need to change our view of how we perceive a credit card. It does not work out the same way as extra money in our wallet. It is not something we take out and use whenever we want. It is best to plan the use of the credit card because we are essentially borrowing money that has to be paid back. And if we miss those payments, we can find ourselves quickly in debt because of all the interest rates and finance charges.
Having a goal
Budgeting has to have a goal in mind. In the case of the game developer, he knows his goal and is working to achieve them. Using a frugal budget can help fast track in reaching that goal. The game developer knows the value of having an emergency fund and improving his skills. That is why his goals include adding more months in his emergency fund and purchasing a computer.
Making sure that the emergency fund can address any possible life emergencies is crucial. It is ideally 6 months worth of your monthly salary. Having this fund can give peace of mind knowing that he has enough finances tucked away to tide him through a few months of uncertainty.
The game developer also uses technology to be able to track his expenses. There are desktop and mobile applications that can help you stay on track of your budgeting endeavour. Some can quickly give you a bird’s eye view of your finances in glance so you are on top of your budget.
The game developer learned about balancing checkbooks from his dad when he was still young. Financial literacy has to start somewhere and learning them as early as possible and as often as possible can help inculcate that attitude into everyday activities. Ahaparenting.com shows that children pick up their first values at home. The same is true for financial habits. Even teenagers expect that their parents will provide them with their first few financial lessons like saving and budgeting.
It is never too early to prepare for retirement. The 26 year old game systems designer is already asking questions about his 401K. The sooner you start with retirement the more secure your future will be. If you have a $1 million dollar target, starting early in your contributions would mean you can contribute a small amount every month. That is because the contributions are stretched over a longer period of time. And if you put your retirement money where it will grow, you can end up with more than a million dollars for retirement.
Planning retirement early
As retirement is a great item in a ny budgeting list, there are a couple of benefits in starting it early. For one, the earlier you start, the more you will have at retirement. It’s as simple as putting in money in a savings account early. The younger you start, you will have more as you grow older.
Another thing is you develop the habit of putting aside an amount every month to reward yourself. This changes the belief that rewarding yourself has to be done by splurging on items. It can also investing in your future. Starting early can also give you the opportunity to stop early. Being able to retire when you want is better than being forced to work for years because you still can’t afford retirement.