UNITED STATES—Budget. Yes that is a very scary word for many Americans. We do not like to hear the word budget or the thought of having to be restricted to a specific budget, but it has more benefits for us than we can imagine. How so? When you budget you get the opportunity to see precisely where your money is going. I’m not just talking about expenses, but the exact categorization of expenses. There are things we sometimes spend excessive money on that we don’t realize until we’re forced to see it.

Let me give you an example: that cup of coffee or tea at Starbucks. Yeah, if you’re spending $2-$3 a day, that’s over $20 per week; in a given month you’ve already spent close to $100. Could you perhaps purchase coffee or tea and make it at home? Very likely and you’ll slice that expense in half if not more. In addition, you have to think about those expenses that are a must. That includes rent or the mortgage, utilities, insurance, food, gas, transportation.

Everything else beyond that some people could argue are wants versus needs. Do you need a cell phone? I guess it depends on your situation. What about Cable? Many Americans went years without it. Satellite and radio services? Like I said, we’ve gone years without those things, so just because they’re introduced doesn’t mean you necessarily need it.

When you come up with a comprehensive budget you need to weigh the pros and cons of your expenses and needs. For me I have to have the internet to do my job, but do I actually need the bundled package that includes a house phone that I barely use or Cable that is excessively higher than what it needs to be.

Even I could cut my costs by half by utilizing streaming services. There are always ways to cut costs, that includes housing, transportation, electricity, gas, car insurance, health insurance, food, the list goes on and on. Turn off the water when not using, turn off lights when not in use, shop for cheaper car insurance, use coupons and discounts available when purchasing groceries, recycle your bottles, I can keep going on and on. However, when it comes to budgeting, you have to be aware of your income. You have to know what you are bringing in and what is going out. Too many people have no idea of income brought in versus income going out.

Now just because you’re on a budget, does not mean you cannot take some of that money and spend it on yourself. You are allowed to treat yourself if you work hard for your money in my opinion. The one caveat would be: don’t overdo it. Let me give you an example, let’s say there’s this tech device you really want, but it costs like $300. You only have $350. Is it the wisest choice to spend what you have in savings to purchase that item you want? I would argue no, but some people seem to think otherwise.

Save a little more before purchasing that item so you have a cushion in your back pocket. I am a firm believer in ALWAYS having funds in a safe and secure place in case of a rainy day because it always transpires. Something always comes up that you least expect, and having that preparation in advance alleviates potential stress that may be heading your way.

The most important thing about creating a budget is you place yourself in a situation where you are able to save money. Saving money is key to our future. By saving not only are you preparing for retirement, but you are teaching yourself and perhaps your kids the importance of money management. Not many people understand basic money 101. It is something we need to teach more in schools, Americans absolutely need it.