Businesses of every size do a yearly budget. Even before they are actually businesses, a budget is put together with a projection of future expenses and income to determine the ongoing viability of the business. Those businesses that fail to plan often are not successful. Plans are not manageable when kept in the mind as thoughts. Successful plans are put in writing.
A 2020 survey conducted by the National Foundation for Credit Counseling found that only 47% of Americans use budgeting methods to keep a close track of their spending. A budget can help keep you on track of where your money is going. It can show you where money is being wasted, what you’re doing with your discretionary income, what expenses you can get rid of, and what if any expenses can be reduced. It also gives you more control over that process. Budgeting will help you prioritize where you’re spending so you don’t put yourself in the red. A plan will also help you identify bad spending habits. Budgeting can become a roadmap for where you are currently financially as well as your strengths and weaknesses in saving and spending.
A personal budget is a finance plan that allocates future income towards expenses, savings and debt repayment. All of these items must be considered in order to make accurate projections so that you can meet needs and goals. Past spending and personal debt are considered when creating a personal budget. Consider what has changed from last year and what you expect to change in the current and next year. For many of you who have changes in the costs of medications and medical care, budgeting is very important. Remember, a budget is only as good as the information you include.
There are several types of personal budgets. The one you decide to put in place should be one that you can understand, meets your goals and objectives and importantly, one that you can hold yourself accountable to.
This is perhaps a good strategy for budgeting beginners. However, not a good strategy in this current economic climate especially if you’re recovering from economic fallout due to the pandemic such as a job loss or your financial situation is in flux.
After reviewing prior year spending, you can then determine a target spending amount for each item. Future projection spending should also be included in this budgeting approach.
Line-item budgeting can initially be a bit time consuming but can really help you get control of your spending and habits.
Following is a list of worksheets and resources as well as how they relate to budgeting that you can use to gain control over your finances. These resources can help you find weaknesses as well as strengths in your financial program as well as how to determine your next steps forward.
I don’t want to fail to mention the importance of an emergency cash reserve. This is one area that most Americans fail to include in their financial goals/needs. Ideally you should have 6-9 months expenses in cash on hand for emergencies. The idea of saving for this should be one of your bills every month.
I know this is a lot, but unless you really plan and see hard numbers on paper then it really is all just a dream and failure to act and fail is almost a reality. We know the high cost of healthcare and planning for these expenses should be part of your tool kit for financial security and empowerment.
You can find the worksheets referenced above here, as well as other notable financial resource. Feel free to download and print out these documents as needed.
If you would like assistance managing the financial impact of myeloma, consider talking to a Myeloma Coach with experience in financial resources. Coaches are myeloma patients or caregivers who can share with you the tools and resources that have helped them pay for the cost of myeloma treatment.
about the author
Diahanna is the Financial Program Manager for the HealthTree Foundation. She specializes in providing financial help, resources and education for multiple myeloma patients. As a professional financial consultant and former caregiver of her husband who was diagnosed with multiple myeloma, Diahanna perfectly understands the financial issues facing myeloma patients.