Where Does Your Money Go? By Oma Edoja

Did you ever hear the nursery rhyme where Mary, Quite Contrary was asked, “How does your garden grow?” Well if she were around today her accountant would probably be asking her, “Where does your money go?”

Perhaps you ask yourself the same question, month after month.
And if you’re like most people, you have no definite answer. You’re not alone; there’s a world-wide club of others just like you, whose salaries are “too short” and whose months are “too long”! (I almost said, “Welcome to the club!”)

If you’re ever going to gain control of your finances, and leave that dreadful club, one thing you’ll have to do is plan the use of your hard earned cash, and stick to your plan. This is what the money people call “Budgeting.”

Now, most people cringe at the mention of the word “budget”. For some it engenders visions of bondage and restraint. I know it once did for me!
But a budget is actually a plan to help you manage your money. It could virtually stretch your money further, and shrink the month shorter!

Budgeting puts you in control of your money. Remember, you control the budget, it does not control you.
So, rather than put you in bondage, a budget gives you control of your money, and consequently your life.
Instead of having circumstances, relatives and impulsive moods determine what happens to your money, you can make the decisions by implementing your budget.

Many have the mistaken belief that budgeting is for the rich. They feel they do not “have enough money” to budget. This is all the more reason for such a plan; it enables you prioritize, spending money on your needs, before your wants, taking care of essentials, eliminating the frills.

It is the process of budgeting that allows you save, invest and multiply your money. This is the path to financial peace, and wealth-building. Wealth comes through the compounding of your savings, not a “fat salary.”
If you have no savings, there can be no investment. With no investment, there will be no compounding. No compounding means no growth. And no growth means financial troubles, as the little you have is eroded by expense and inflation.

You can start a budget today. Simply categorize all your expenses, e.g.: groceries; utilities; transport; rent; charity; personal development; savings; miscellaneous-- whatever suits you. Then allot a percentage of your income to each category.
Voila! You have a budget!

When I drew up my first budget I realized I could make room for all the things that truly mattered and throw out those that didn’t. If I needed more money in any category this became an incentive to increase my income as a whole.
And this is made possible through building multiple streams of income, where you earn money from other sources beside a salary or primary source.

Another great benefit of budgeting is that it teaches delayed gratification, thus delivering you from the demons of impulsive buying! Delayed gratification is a habit essential to saving and wealth-building. If you want something that’s not in the budget, you just have to save from the miscellaneous category.

In summary, a budget helps you see:

• How much money you really have to spend (it isn’t all yours—you owe the landlord, the doctor, the government etc)
• How you want to spend it (not how people and circumstances blackmail you into spending it)
• How to spend it in the future (savings allow you plan for the future)
• How you can live on less than you earn (savings help you do this)
• How you can stay out of financial trouble (now you can cut your coat according to your cloth!)

Would you like to start a budget today? I sure hope you said yes, or that you already have one, and use it. No matter the size of your income, a budget can help you bring order to your finances and take control to your situation. It takes discipline and patience to follow a budget. But the alternative is to remain “in the club!” And you certainly don’t want that!

So, get to work on your budget. Do some fine-tuning, if you already have one. Your discipline and patience will soon pay off. And you’ll be out of the club at last!


Copyright 2005 Oma Edoja
This article MAY NOT be reproduced, in part or in full.


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Oma Edoja is a writer, motivational speaker and infopreneur. She writes and speaks on a variety of topics but mainly motivation and self-help. She publishes a free, fortnightly, inspirational newsletter giving “Nigerian inspiration for the Nigerian situation.™” View samples of her newsletter at http://up-mobile.blogspot.com and get a bonus info pack when you subscribe, titled Four Steps to Success, plus free coaching with your top three goals.
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