As we continue our series of videos from my sermon on running hard, this week I am talking about the cornerstone tool in your personal finance: your budget.
What do you think of when you hear the word budget? Does it scare you? Does it make you defensive? Does it stress you out?
A lot of the emotional reactions that you have to a budget have to do with a fundamental misunderstanding of the purpose of the tool. Its purpose is not to tell you what you cannot do – its main role is to help you understand what is happening with your money. It puts a fence around your money and allows you to watch what goes out – and what events try to come in and disrupt your plans. When I explain this concept, I like to use the story that I share in the video below. In the video, I also talk about another tool that I have found very helpful over the years to help people see what is happening with their money: the Money in Motion table.