My guess is that most people would answer with, “To control our spending.” Or perhaps, “So we don’t spend too much money.” Or if you’re a nerd, “To properly allocate limited resources.”
That does make sense, doesn’t it? Many people come to realize that they need to budget because they know they make lots of money, but they don’t know where it all disappears to at the end of each month. Indeed, just about every seminar or book on money goes over this basic cornerstone of financial management.
Here’s a quick and dirty summary of how most people teach how to do budgets. [Read more…]