Money Obedience

Have you ever wondered why we hawk on using a free budget planner, setting up a budget, working towards lower debt, etc.? Well, to answer this question let me give you an observation I made in the park recently.

When I went for a run in the park on one of the nicest spring days of this year, I saw two dog owners walking with their dogs. The one owner was pulled all over the place by a medium sized dog whose breed I could not identify. This owner held tightly on the leash trying to keep the dog in check. I could hardly pass the two of them as I was running by them. (Needless to say I was also a little scared since I was not quite sure how the dog would react to a runner coming up from behind and how well the owner could control the dog.) Not much further the other dog owner was walking leisurely with his golden retriever close to his heel. This owner seemed to enjoy the nice day in the park much more so than the first one did.

The first dog owner reminded me of a person who is not responsible with his or her personal finances. He or she will most likely overspend, that is he or she will spend more each month than the monthly household income. This leads to higher debt and an inability to add money to long-term savings such as a retirement account. I can imagine that such a person will end up worrying about debt and the lack of savings. Tons of questions will haunt him or her. How will I be able to pay back all this debt? How will I live in retirement when I don’t want to work anymore or when I cannot work anymore? Financial problems and worries will dominate the overall wellbeing. Money, or better yet, the lack of it will control that person.

But when you do the opposite of the above scenario, you start out by spending within your means. You will have some money left over each month, you will be able to set aside a few dollars for emergencies, you will not incur debt, and you will be able to save for retirement. In short, you control your money. You are in charge. You enjoy life a lot more just like the second dog owner enjoyed his walk in the park.

setting up a budget is usually the first step to keep a household in good financial order or to get the household into better financial shape. All other benefits like lower debt and growing retirement savings come from controlling household spending. – Now you know why we talk about budgets and spending so much, right?