A Strong Budgeting Foundation

Photo by: Joop Dorresteijn

Building a Strong Budgeting Foundation

Still Standing

Over the weekend my wife and I had a great conversation with some youth about foundations and roots. We discussed the forces that might be working against a building, or a tree, that might bring them down – and why they would need a foundation (or roots) to withstand those forces.

Our conclusion was that good foundations and good roots need two qualities:

They need to be deep and they need to be strong.

We have many foundations in our lives and our 95% is a big one. It not only “keeps us up” from month to month, but also helps us weather storms and constant change.

The two principles of a good foundation seem to correspond to the two main budgeting principles I try to evangelize here on WithinMeans:

Living Within Your Means Will Make Your 95% Deep

As you use a budget to actively spend less than you earn, your wealth and safety will increase from month to month, a little at a time. Your financial foundation will get deeper and deeper, and you’ll find yourself weathering unexpected costs better.

Budgeting Needs Before Wants Keeps Your 95% Strong

Spending money on what you want, then hoping you have enough for your needs, is a weak foundation at best. If your needs are budgeted first every month you may see some erosion on your wants, but the important things will always have what they need to keep you standing.

How else can you deepen and strengthen  your 95%?

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