I can’t believe that I’m so late in posting about probably the most important week of Financial Peace University, the cash flow planning lesson, also known as the dreaded budget. Attendance to this lesson really determines if you’re willing and able to make a change in your life.

Without a budget, you won’t pay off debt, save for an emergency, save for retirement or your kid’s college, pay off the house early, or be able to be a generous giver. Honestly, all of these things depend on you stretching every dollar and knowing exactly where your money is going.

Dave covers a few topics before jumping into how to do a budget. He talks about the reasons we don’t do a budget and things that will cause a cash flow plan to not work. For example, if you spend time making a budget and then don’t follow it, you’re not going to see a whole lot of progress. Doing a budget also makes sure that you cover the necessities or “four walls” as he puts it – food, shelter, basic clothing, transportation and utilities. Speaking from experience, doing a budget makes you feel like you somehow have more money each month.

I wish I could go into all the details about how to do a budget, but really, the best way to learn it is through application. Dave covers the zero-based budget, using the envelope system, and how to budget if you have an irregular income. I’ll try to cover how to create a budget in a future post.

At this point, you might be thinking “a budget just doesn’t work for me because of this reason or that reason.” Really?!?!? The truth is you shouldn’t be working without a budget or you’re just wasting your time.

Featured Image courtesy of patpitchaya / FreeDigitalPhotos.net