Ask the Expert: Money Management

By Jesse Tran, Certified Financial Counselor, The Village Family Service Center

Q:  What is the difference between paying my bills and having a budget?

A: The difference between paying your bills and having a budget is a plan! A budget is a way for us to plan how to spend our income. Our budget (spending plan) allows us to make sure we are not going to spend more than we earn and that our top priorities (i.e. housing, food, medical, transportation) will be met. It also allows us to plan and save for periodic expenses such as car/home maintenance and repair, gift giving or vacations. Perhaps the most important reason to have a budget is to avoid accumulating debt. When you plan and track your spending, you will know if you have a shortage or a surplus of money each month. A shortage left unchecked will result in the accumulation of debt. You can just pay your bills and muddle through month to month, or you can create a budget and gain control of your financial future.

 

Sponsored by The Village Family Service Center

 

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