The California Foundation Fund was an organization that began in 2011 but later dissolved. The goal of the California Foundation Fund was to break the cycle of poverty by establishing programs. Each year the fund’s goal was to grow community empowerment and impact through scalable programs.
What does this mean? Essentially the organization stated that investing to bridge the gap of socially conscious education services can help empower youth and underserved communities.
The mission of the California Foundation Fund was to educate empower and help communities build wealth. They stated that the organization had a history of community development, philanthropic outreach, and resource development. So, what exactly does this mean and what can it teach us about budgeting.
California Foundation Fund and Budgeting
When the California Foundation Fund began, it had setup a Memorandum of Understanding (MOU) with Alliant International University to provide classroom, graduate students for different workshops.
So, we know that the goal of the California Foundation Fund was to break the cycle of poverty, but how exactly can you do that? Although they didn’t explicitly say it, I would hypothesize that itw as about budgeting.
What is budgeting?
The definition of a budget per Investopedia can be thought of as an “estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis.” This is difficult to understand, so my idea of budgeting is to know exactly how much you make each month and how much you spend each month.
You can use a pen and paper or you can use an excel sheet or a budgeting app or in my case, I use a Google sheets budget template.
Why You Should Consider Budgeting
You should know how much you make each month. You should know how much you spend each month. If you do not know how much you make or spend each month, how can you understand whether you are making more than you are spending?
When you spend more than you make then you will experience a deficit. This means that you will have to make up for this deficit in some way. You could borrow money from friends or family. Or, you can put additional money on your credit card. In most instances, this can be dangerous because you are paying for your current money with future money, often at interest.
In these cases, your money is not working for you (ie you are making interest from your investments). You are working for your money. Budgeting can help you make more than you spend, thus creating a surplus. A surplus can allow you to invest that money. Now your money can work for you instead of you working for your money.
Understanding the Zero-Based Budget
Dave Ramsey preaches the zero-based budget. A zero based-budget means that your income less your expenses equals ZERO. Why is this important? This is important because you are telling your money where to go each month. You can “spend” they money to your savings, but the goal is to make sure you understand where each dollar is going.
In my opinion, the entire goal of budgeting is to control your money instead of your money controlling you. When you zero base budget, you give each dollar a mission and an objective each month. You are telling your money where to go instead of paying interest on money you spent on things you cannot afford.
Next Steps
The California Foundation Fund’s mission was to build wealth. How do you build wealth without a budget? Hint: It’s very difficult. Why? Because if you do not know where your money is going each month, it’s possible that you are prone to spend too much. So, what are the next steps:
- Find a budgeting tool that helps you get out of debt and create wealth as soon as possible. Check out our article covering debt payoff apps in 2020.
- Consider doing zero-based budgeting. It’s not perfect, but telling your money what to do can be satisfying.
- Live a financially free life and alleviate poverty, building wealth. This is what California Foundation Fund taught us about budgeting. I hope you learned something too.
I would love to hear from you. What have you learned about budgeting over the years? What are the tips and tricks you’d like to share? Is there any foundations or organizations that expanded your views of budgeting?
