Do you need a budget?

Answer

You already have one!

Complete Answer

Simply put, a budget is how you spend your money. If you receive money (income) and spend money (expenses) you  have a budget. What you need to develop is a “Spending Plan.” I prefer this term because budget has such a negative connotation, i.e. “that’s not in the budget”, “I can’t buy this or that”, “I can’t buy fun stuff because fun stuff is not in the budget” et cetera.

So what is your Spending Plan? Would you be able to clearly explain to someone your income and expenses for the month? You should be able to describe your Spending Plan for one month. For example, “This is the amount of money I take home (income) each month and this is how I spend the money (expenses) each month.”

Knowledge/Skill

Describe your Spending Plan for one month.

Do you have to know how to manage your money?

Answer

Yes, as long as you have money you should know how to manage it.

Complete Answer

Starting around the early teens, we begin to earn money and make decisions about it – how to spend our lunch money, what shoes we like, what movie we would like to see, et cetera. By the time we are adults, we have to make most, if not all of the decisions about our money. So it follows that if you will be making decisions about money, you would benefit from a basic understanding of money management, “Financial Literacy.” These decisions will impact your financial wellbeing now and in the future.

We live in a country that values freedom, and this includes freedom in the market place – we get to spend or not spend our money however we wish. This coincides with a basic tenant of the Church that we all have free will, and that includes freedom to make decisions about money. We have the freedom, as well as the right, to make our own financial decisions.

Knowledge/Skill

Money management skills (Financial Literacy) will help you make  prudent1  financial decisions.