Budgeting 101: The 5Ws of Budgeting


Budgeting. That’s a word every young person entering adult life will become very familiar with; unless of course you’re parents happen to be extremely wealthy. For the rest of us, budgeting is a must, but it’s also a benefit; learning to budget teaches you not only discipline, but how to manage in the face of adversity and overcome. I also want to point out that although we tend to think of budgets in dollars and cents, the application is really a lifestyle issue. Let’s take a look at the 5 W’s of budgeting: who, what, when, where, and why.

Who? Who does budgeting apply to? Well, we’ve semi-answered this question already: it applies to anyone who wants and needs more than they can afford to buy. This applies to almost all of us, in one way or another. Learning to deprive ourselves of something goes along way in teaching us satisfaction with what we have and how to make do with what we have.

What? What does budgeting apply to? Again, the answer is almost everything about our lives. You can apply budgeting not only to your finances, but to your time, your space, your personal versus work allocations, even your daily activities at some point will be budgeted, this however isn’t a real issue until you try to juggle jobs, family, and personal time.

When? When do you budget? You should consider budgeting something once there is an overabundance of want or need and a limited supply of funds or time to obtain those wants and needs. You can consider budgeting when you want to go to the movies, but your funds are limited, and your time needs to be devoted to schoolwork; learning to allocate enough of your time in advance of the Friday night 7 o’clock showing in order to complete the necessary homework, is a budgeting of your time. A budget will only work however, if you discipline yourself to meet your budget goals.

Where? Where does the budget concept originate? The answer to that question isn’t really a where. It has been a part of life so long as there as been life, simply because the ability to meet every want and need doesn’t exist. There must be some form of budgeting applied in your everyday life, in some way. Where do you apply these concepts? Your personal life, your financial picture, even your personal desires must be fulfilled in moderation or you create a situation known as overindulgence, and this leads to unhealthy excesses.

Why? We’ve already answered this in a sense, in the paragraph above. But to take it a step further, overindulgence and excess are unhealthy. Over eating leads to obesity, over spending leads to poor credit history, and so on.

The concept of budgeting is often thought of only in terms of finances, but the truth is this particular concept has a place in almost every aspect of our lives, and an early disciplined approach to budgeting can lead to an extremely productive and satisfying life.

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