We had a baby! | Why you need a budget
Nov 19, 2021I'm sure many of you noticed, but I missed last week's newsletter. I had planned to write the letter Monday or Tuesday evening, but my wife went into labor Monday so I didn't have a chance.
So on November 9th, our little boy Karsten Warren was born.
We've received an outpouring of support and so I want to say from the bottom of my heart THANK YOU to everyone. It has been a whirlwind since it is our first, but we're excited for the journey ahead.
If you're interested in hearing about the meaning behind his name, you can listen to one of my podcast episodes for this week.
Why you need a budget
Only 50% of Americans have a budget. When I went hunting for stats, I wasn't sure what to expect, but I was a little surprised it was that high.
That probably says more about my faith in Americans than anything, huh?
When I've spoken to people about budgeting, it is almost always treated as if it's a bad word. It feels restrictive or too adult.
It's no wonder people don't want to talk about it!
But, budgeting is essential to your financial future. A failure to budget is a failure to be a good steward of what you have.
This week I want to address why we budget and then next week I'll follow up with the how.
A budget tells you where your money is going today
Have you ever had that moment when you thought you had cash in your wallet but it's mysteriously gone?
Most of the time the mysterious thief is YOU!
When we don't track our money, it has a way of disappearing from our lives. I understand that many of you don't want to track your money. It seems scary. But, we're not tracking our money to judge, we're tracking our money to know.
It's only when we start understanding where our money is going that we can do anything about it.
When we don't know where it goes, we're destined to be making decisions with money that we wouldn't be if we actively thought about it.
A budget helps you be responsive to unplanned needs
As if 2020 wasn't crazy enough, our dog ate something he shouldn't have. We have no idea when or how, but one day we noticed he was lethargic.
When he continued to worsen, we decided to take him to the emergency vet. One surgery and thousands of dollars later, he made it through and is doing great today.
While I'm not celebrating spending thousands on my dog, we can celebrate that we were financially prepared for the unplanned expense.
We never had to ask or consider if we had enough money.
Because we're actively budgeting, I knew exactly how much we had in our emergency fund and health funds. We were able to make the decision without creating financial stress.
Even in situations where you cannot afford the unexpected, it gives you a clear understanding of the impact.
When we're not prepared for the unexpected, you not only have the stress of the event but also the stress of related to money. You may pay for the expense to only realize weeks later you don't have cash for rent or gas or food.
A budget helps you plan for the future
Only 30% of Americans have a long-term financial plan. We'll address the specifics of this at a later time, but that's scary.
While money shouldn't run your life, your lack of plan is allowing money to do just that.
Your lack of planning is putting your family's future in jeopardy.
Wrap-up
Next weekly we'll discuss what a budget is, and I promise it's not as intimidating as you think.
If you're interested, I released a podcast episode on the same topic as this email, which you can listen to by clicking below.
Only 50% of Americans have a budget. Today I'll discuss why you should be one of the ones with a budget.
Question of the week
What app do you use to budget? Also, what is one thing you do that helps you stay on top of your budget?