Lots of folks are feeling the pinch of increases in everyday expenses when the paychecks have not increased to catch up. Food costs have increased, and now, consumers are seeing rising costs in staples such as milk, eggs, bread and meat. The cost of heating your home has increased and with the brutal winter weather it means more money coming out of your pocket to stay warm.
Even gas prices have been on the rise for years. I know people that say, “I never have a full tank of gas because I just can’t afford it.” But of course gas is how we get back and forth to work, pick up our kids, etc. It’s vital. But this is why budgeting is so important. The ability to manage your money is critical regardless of what the economy is doing — but in hard times it is even more important. Setting up a budget provides insight into where your money is going and how to manage it effectively.
A budget provides a quick snapshot of how your income will be spent. It can also help you decide what your needs are versus wants.
For example, if you see that your heating costs have increased then you review your budget to see where you can take money from, whether it is entertainment, clothing or eating out, to cover the increase.
A budget is the first page in your financial toolkit. If done well, it can put you on the road to financial security.
Black Enterprise Columnist Jennifer Streaks is a Financial Expert, Author & Pundit. Continue the conversation by following her on twitter @JStreaks or visiting her website at www.JenniferStreaks.com