The Beauty of the Budget

I recently read with great interest a front-page article in The Wall Street Journal about credit card debt reaching an all-time high. Several factors have contributed to this trend, including challenging economic conditions. But there is more to the story.

Many who are dealing with this cite their lack of basic understanding of financial matters as a contributing factor. One person, despite an annual salary in multiple six figures, simply lost track of spending while using their credit card, resulting in a five-figure balance and minimum payments being made at an interest rate of twenty six percent. Finally getting this sorted out, this individual found a practical solution to keeping track of spending; establishing and sticking to a monthly budget. Imagine.

Teaching basic finance to graduate marketing students has made me aware of a startling lack of basic business and finance acumen on the part of even highly educated individuals. The implications of this can have a major impact on both their personal and professional lives.

One module in the class deals with creating a budget. We use as an example a personal budget. At the start of the class I ask how many items the students think will populate their budget. Six or seven is a typical response. As the class unfolds and I ask them about their spending plans, the number grows. Each time I bring up one more item they will spend money on, the response is “I have to budget for that?” Well, if you know it’s coming, then yes of course you should. The class session ends with about 35-40 items (there might be more, but the class is only two and a half hours long!).

Teaching basic finance is worthwhile on so many levels. In business, consider the impact of having team members, no matter their position or responsibility, understand the importance of cash flow, operating profitably, establishing and managing a budget and building a strong balance sheet. How would this enhance their appreciation of the many challenges in running a successful business? Consider the added benefit of what this awareness can mean in their personal lives.

Beyond the Bottom Line is an excellent training tool for teaching basic finance in a modular, easy to understand way. The workbook, along with the companion Instructor’s Guide, can be used individually or, better yet, in small groups.

For more information including sample chapters of both the workbook and the instructor’s guide, contact me at joe@ajstrategy.com. Or visit my website as ajstrategy.com.

The preceding content was provided by a contributor unaffiliated with Printing Impressions. The views expressed within may not directly reflect the thoughts or opinions of the staff of Printing Impressions. Artificial Intelligence may have been used in part to create or edit this content.