The Wall Street Journal has a good article on creating a “spending plan”, that attempts to ease the connotation of spartan living the word “budget” often brings to mind:

“Budget” might well be the dirtiest word in the financial language.

People hate budgets because budgets seem confining. Like diets, budgets are forever begun with grand intentions, only to be quickly ditched when spending restraints seem too much like a yoke preventing you from disbursing your money as you like.

But in today’s environment, where unemployment is on the rise and where consumers are hung over after a multi-year credit binge, a budget is the very tonic many households need. It doesn’t have to be painful if you understand one salient fact: You control your budget; it doesn’t control you.

Every month, you dictate how you spend your limited financial resources. Your budget has no control over that. You can choose to eat out every day, or you can choose to replace your wardrobe, or you can choose to pay off additional principal on your debt balances, or you can choose to afford a getaway over a long weekend. Whatever you want to do with your money, you can do it.

But here’s the catch: You can’t do everything.

That last paragraph is the key. In a word: prioritize. How to prioritize is explained in great detail in the rest of the article.

I don’t personally use a budget, but I’m pretty good about saving and setting money aside for regular large expenses such as taxes, insurance, unforeseen car repairs, etc. but I can certainly see the benefit of having a budget, er, spending plan.

 

Via LifeHacker.