Beer Money (Partners' Spotlight)

When I was in college, I had a part time job where I earned enough money to pay rent, buy groceries, make a car payment, and pay for other typical student expenses.  Occasionally, I’d have a little bit extra, which quickly became what I liked to call Beer Money.

Unknowingly, I had taken the essential elements required to create and maintain a budget which, like beer, only requires a few essential ingredients to produce.

When I was in college, I had a part time job where I earned enough money to pay rent, buy groceries, make a car payment, and pay for other typical student expenses.  Occasionally, I’d have a little bit extra, which quickly became what I liked to call Beer Money.

Unknowingly, I had taken the essential elements required to create and maintain a budget which, like beer, only requires a few essential ingredients to produce.

Without getting to technical, this is the basic process:

  1. Grain is seeped in hot water.
  2. Then the brewer adds the hops and boils the mixture.
  3. After it cools, yeast is added and through fermentation converts the sugar to alcohol.
  4. The mixture is bottled and aged creating a final product to be enjoyed - a nice cold beer.

What I’ve come to realize, is that building a budget is extremely similar to this process.  It only takes four ingredients and they must be combined in a specific order, and over time, will create a finished product.  Like beer, the ingredients can come from different places or have different flavors which make it look or taste little different.  However, the final product is basically the same.

  1. Create a tracking tool – Use a notebook, a computer spreadsheet, or another system, this is essential to record everything.
  2. Determine your income – Enter how much money you have coming in and where it’s coming from into your tracking tool.
  3. Incorporate your expenses – Define how much you spend and where it goes. 
  4. Establish goals for the future – This will give purpose to your efforts converting tracking of income and expenses into a budget and better control over your finances!

But here’s the important thing about budgets.  They seldom turn out exactly as planned and unlike the recipe for beer, sometimes your monthly budget “recipe” changes.  There are always unanticipated expenses, like car repairs and travel.  When this occurs, you have to redeploy some of your budgeted resources and yes, possibly spend your “beer money”.  But that’s the point. Knowing you have built a little bit of “flex” into your budget, gives you the confidence to navigate the unexpected changes that will inevitably occur to your monthly expenses. 

Financial experts all agree that having a realistic budget is the first step in developing a strong financial plan for your future.

So, the next time you’re enjoying an ice cold beer, sit back and relax knowing that you’ve taken the first step in securing your financial future by creating and sticking to a monthly budget.  And knowing that, will make that beer taste a whole lot better.

Nathan Nelson, CRA Officer Eagle Bank in cooperation with the Office of Financial Empowerment and local brewers presents Beer Money on a regular basis in to facilitate discussion and share ideas on how individuals and families can become more financially empowered.  For more information, visit BEERMONEY-STL.com.

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