What is a Budget… Really?

Although the answer may seem obvious, the word budget is quite often misused and misunderstood.  To begin, what you spend your money on IS your budget; good or bad, whether you know it or not.  For this reason a budget cannot be created so much as it can be modified.

Trying to set a budget, without fully knowing where all of your money is going leads to significant problems; you may see short term success, but in the long run the budget is doomed to fail simply because it’s not in line with your reality.  Let’s say you can accurately list 80% of all your expenses; if you were to ‘create’ a budget based on those expenses, you’re going to run out of money.  Something is going to have to pay for the remaining part of your life that has not been accounted for; that something

usually comes in the form of debt.
 
You must first understand where your money is going before you can set an effective budget.  The more you know the more accurate your budget will be.  You have to be able to include every part of your life, not just the big stuff, like housing or transportation.  Your life is more than just utilities and cell phone bills.  Daily Dish™ was specifically created to help you keep track of all those expenses that happen when you are out and about, that don’t necessarily come with a bill, but can add up to a significant proportion of your overall spending.
 
The standard model of a budget is inherently restrictive; before instituting severe belt tightening, take a look at how much money you are spending and on what.  You may be surprised to see how much money you can free up to pay for more important parts of your life, by cutting back on or eliminated the less important ones.  Your budget should reflect your reality and your true tastes.  The bottom line is; stop spending your hard earned money on stuff that doesn’t give your life true fulfillment, and refocus that money on the things that do.