Why Maintain a Budget

I am an accountant by profession; they say we (Accountants) are mean, stingy and that every bit of the cent has to be accounted for. Not to mention that we are boring people who hardly ever have a life. Most of us are said to be workaholics. Do these accusations have any truth in them? Yes. Do they offend me at time? Yes. Do I agree to them? Yes and No. Just before you dismiss me for the statement above, listen to me.

An accountant is just like an actor, we are given roles to play. The roles include having every bit of the cent accounted for and making sure that we get value for money released. If you tell a lie repeatedly, you end up believing it at some point, if you play a character for long you become it at some point. But of course we had exceptions to most of the rules I came across in school. This aint no exception. But just like any good actor we forget parts of the scripts. Just like any other actor we got a different life which is real. Despite managing ‘loaded accounts,’ we got a slim payslip just like yours; the month is always longer than our finances just like yours. We need loans and salary advances to meet urgent needs just like you. To the contrary we loose money to wrong investments, get conned and even find ourselves deep in debt. Most people assume accountants to be good managers of personal finances but to the contrary this is not always the case. Seldom would you get an accountant that maintains a monthly budget. But why is it so? For heavens sake, I inevitably maintain a budget 12 months a year, why do I need one when it comes to my finances? Mmm….

Why are your talking about the accountant yet I expected something to do with budgeting? Good, am glad you asked. I just wanted to drive a point home, I am an accountant and I maintain a personal monthly budget. Not because I am an accountant, but because it is also spiritual. You say spiritual? Yes. Habakkuk 2:2 .So what is a budget as per my world? A budget is Vision drawn down in numbers. When you write something down rarely would you forget? You will read it often and unconsciously believe it. It is said that as long as you do not know where you are going, anywhere is good enough for your destination huh…Ok so is life, we need to know where we are going financially. A budget gives you the ability to make informed spending decisions without guessing. It’s a way to help you organize your finances–it tells you what money comes in, what money goes out and where your money goes. A budget will deliver your from the hand to mouth experience.

Interesting, having a budget is not the main thing, keeping to the budget is! Do I keep to mine? Yes I do. Is it difficult? Difficult is an underestimation. But the trick is, make the budget way before you get the payslip , this way you will be more sober to critically draft it. Make it very simple and flexible. Your budget should not be complicated; you do not need a software neither an expert. No, that is not necessary, a note pad or an excel spread sheet will do.

It is an exercise you will never regret for taking a minute or so to think about. We all want to be financially free at some point in our life. But you know what, it just doesn’t come. We have to work towards it. Here are some tips I would like to share with you:

No money is little for budgeting all you got to do is spend less that you earn.
Draw down a monthly budget. Let your budget be detailed to capture things like, Self (Pay your self in the budget), tithe, offering and the small monies you give to funny committees.
Start saving for your retirement as early as now (of course if you are not already late). All the same it’s never too late to start.
Save at least 10-20 % of your income and maintain a separate savings account for this purpose, and if this is so tempting for you join a reputable SACCO. (This has helped me). Remember a shilling today will be less tomorrow. So ( Next point)
Have plans, both short and long term investments for your savings and other available funds.
Maintain an emergency fund that can sustain you for at LEAST 3-6 months in the event of loosing your source of income.
Learn to say ‘NO’ once you exhaust your budget line. Wait for the next period to meet the expense. Even if you got access to your savings account.
Avoid bad debt and the use of credit cards e.g a car loan is a bad debt if it aint bringing you no income. But buying a car from your savings is not a bad decision. (I do not dispute the fact that cars are becoming necessities in the current society.) All I say is be wise.