As we know, every dollar matters. Every dollar counts. Budgeting is not glamorous or fun, but it’s absolutely essential if you are to financially succeed in the long run.

Unfortunately, most people think of budgeting as simply being a ledger of expenses and income. That’s part of it, sure. That’s the part your accountant attends to, and you need to know those numbers backwards and forward, but there are three other components to budgeting that are critical, and if you’re not doing these things, then you’re increasing your chances of failure.

Expect The Unexpected

It is true that in life, things happen. If your budget doesn’t include space and funds for unanticipated opportunities and events, then you have a potentially dangerous blind spot. That’s not good, and the first time something unexpected happens, it can send you, your family or your business into a tailspin.


One of the best ways to utilize your budget is to treat it as a foundation. You can build on it to forecast the effects of various plans you have in the works.

Blending the facts of your budget with the expectation of future income streams gives you a more accurate picture of the potential outcomes of developing those new income streams. It gives you a clear picture of what you can and can’t afford to do.


It’s not enough to simply write down and keep track of your income and expenses. If you want to make the best use of the data you’re collecting, periodic review is crucial. It’s the only way you can gain a real understanding of how you are doing over time, and it will allow you to spot potential problems while they’re small, and thus, easily fix them, rather than being taken by surprise simply because you didn’t have a firm understanding of the numbers.

Budgeting might not be fun, but it lies at the bedrock of every successful person. Even if you’ve got people to keep the books for you, you need to have a deep understanding of those numbers and what they mean for your future and your family.