All About Budgeting (pt 1)

Assalamu Alaikum girlie,

Today, we’re going to talk about the B-word. **ughh**

BUDGETS!! (part 1)

What a Budget Is:

• A budget tells your money what to do, rather than you wondering where it went. It’s your personalized roadmap to financial well-being.

• It's not just about tracking expenses; it's a strategic plan that allocates your money with intention.

• Think of it as your financial GPS, guiding you toward your goals, whether it's saving for that dream vacation or building an emergency fund.

What a Budget Is Not:

• Contrary to popular belief, a budget is not a financial straitjacket. It's not about restriction; it's about empowerment.

• A budget is not a punishment for spending but rather a tool that helps you align your spending with your priorities.

• It is not something for the tightwads. You are in control of the budget, not the other way around.

Common Myths About Budgeting:

1. Myth: Budgets Are Only for Those Struggling Financially.

   • Reality: Budgets are for everyone! They're a proactive tool to manage money efficiently, regardless of your financial situation.

2. Myth: Budgets Kill Spontaneity.

   • Reality: A well-crafted budget allows room for spontaneity by allocating funds for leisure and fun activities.

3. Myth: Budgeting is Too Time-Consuming.

   • Reality: Budgeting can be as simple or detailed as you make it. Spending a bit of time upfront can save you stress and help you achieve your financial goals.

4. Myth: Budgets are Restrictive.

   • Budgets are built around your unique lifestyle. Yes, there are general recommendations; but a budget should reflect your values because you choose where to spend your money. You control the budget!

Budget vs Expense Report:

Budget:

• A forward-looking plan that outlines how you intend to allocate your income across various categories.

• It helps you make intentional decisions about your money before you spend it. Budgets are proactive.

Expense Report:

• A backward-looking record of how you actually spent your money.

• It keeps track of things you have purchased, after you spend the money. Expense reports are reactive.

So next time someone looks at you funny when you tell them you budget, tell them it’s what the financially-savvy people do! They’re welcome to join the club😎 

Next week, we will dive into how to create a budget that fits with your lifestyle.

Until then, bye for now.

Fatimah 🌼

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