Page 9 - Book2E

What is a Budget, and Why is One Necessary for Financial Success?
Establishing and living by a budget is by far the most important thing you can do in order to live within your means; grow your level of savings for emergencies, education, and recreation; and reduce or eliminate your reliance on credit cards and loans. It’s also the most effective way to ensure you have the money on hand to make your monthly payment in accordance with the Family Financial Education Foundation (FFEF) Debt Management Program and to take advantage of the “Roll-Up” process.
It’s not just individuals that need to create and follow a budget. Governments, corporations, hospitals, schools, and other organizations must do the same in order to survive and
succeed financially.
Business executives spend hours decid-
ing on the use of capital, while families
sometimes spend only minutes on major
decisions such as vacations, television
sets, or remodeling their homes. The
more it costs, the more time should be
spent making the best possible decision. It’s also important to decide what will happen if you don’t make the purchase. Financial mistakes can be as devastating for a family as they are for a business.
Advice is what we ask for when we already know the answer but wish we didn’t.
—Erica Jong
1