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Budgets are like the New Year’s resolutions of personal finance. We all know we should have one and we all know it’s a fairly simple thing to follow—at least in theory. Like resolutions, we often map out personal budgets with the best of intentions, only to abandon them a couple of weeks later.
JEN: Fortune teller? Ah, sweet, I can't pass up a good deal.
LUNA: Come in, come in. Cross my palm with silver to unlock the secrets of eternal prosperity.
LUNA: It's twenty bucks, kid.
JEN: What? I mean, of course. I thought this was supposed to be a cheaper place?
LUNA: I sense… I sense your name is
LUNA: And you appear to be a plumber?
LUNA: But there is more than meets the eye! For you have some sort of… part-time job?
LUNA: Great! So then you have a regular pay check coming in. Draw a card, Jen. Choose wisely.
JEN: Oh no! What does it mean?
LUNA: Oh that's just car insurance. That's usually an annual one so that goes over here. Draw another. Oh my! With that card I sense a powerful energy here.
JEN: The utilities card? Wait a second. Utilities, income, expenses… are you budgeting me?
LUNA: Well, yeah.
JEN: I thought you read fortunes.
LUNA: You won't have any fortune left for me to read unless you know how much you spend versus how much you earn. Your income is actually less than your paycheck or salary. When planning a budget, you must factor in taxes and deductions, otherwise you will be budgeting money you don't even have.
JEN: But budgeting is mostly for saving up for big stuff, right? I pay my rent and Internet and I still have money leftover, so I'm good.
LUNA: How do you know what you can and can't afford?
JEN: Well, I look at my account balance, and if there's money there I know I can spend it.
LUNA: Your palm! Show me your palm.
JEN: Palm reading? Now we're talking. Ow!
LUNA: No more spending until you give every dollar a job! Part of that account balance that you're freely spending on fun stuff should actually be going to savings and one-time payments. Budgeting doesn't mean feeling guilty for fun purchases, it means feeling confident about them.
JEN: Like being in control of your own destiny!
LUNA: Sure… look! My crystal ball!
JEN: What do you see?
LUNA: It's… it's a warning. An unforeseen circumstance. An emergency of some sort!
JEN: Oh no!
LUNA: It is unavoidable, Jen. If you do not prepare yourself, it will cost your dearly.
JEN: That sounds horrible! What is it? An accident?
LUNA: It could be. Or just like, your car doesn't start one morning or there's a loss of income in your household or something like that.
JEN: Oh this is a budgeting thing again.
LUNA: An emergency fund is an important part of your budget!
JEN: It's cool, I get it.
LUNA: Are you sure? Because I predict many more sessions for you with the Budget Fortune Teller at a very reasonable rate.
JEN: No, I think I got it. Budgeting is about control, I need to be real about my income and watch out for sneaky expenses and savings and emergency funds are important. Great!
LUNA: But the crystal ball told me! I foresee at least seven to eight more sessions! Luna has bills to pay, too! Hey!
JEN: This is so pretty.
LUNA: Why thank you! I've had it for years, it's… oops!
JEN: I bet you didn't foresee that emergency expense!
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