Budgeting
is a basic tool for managing your finances. Unfortunately because of the
negative connotation that most people have about budgeting we avoid it. We think of budgeting as restricting. We think of budgeting like extra work. I recently attended a leadership class where
they taught if you know the “why” of what you are doing, then you will be
better equipped to effectively complete whatever it is you are doing with
purpose and direction, in knowing the why.
Look
at budgeting as liberating, look at budgeting as giving you choices of what to
do with your money, instead of your money telling you what to do, you are
telling your money what to do. Remind
yourself with budgeting you enable a plan and budget for fun things that you enjoy
not just bills, entertainment, vacation, etc.
So although there is work involved in sticking to your budget, the
benefits far outweigh the work.
Ten Benefits of Budgeting
1.
Quality of life – When you budget you tell your
money where to go, instead of wondering where it went at the end of the
month. You will live more
intentionally. You get to plan and
prepare for those fun things you desire in your life, vacation, new car, etc. Your quality of life will improve as you
budget and plan your money.
2.
Accomplishing goals – With budgeting you live more
mindful of your goals. Do you have a
goal to live debt free, to give a larger amount to charity, to buy a new
car? Whatever your goals are, with budgeting,
you will plan and prepare to actually accomplish those goals instead of just
wishing you could give, wishing you could buy a new car. Budgeting is your action plan to accomplish
your goals. Say you want to save $2,500
in a year, break that goal down, what must you save per month, per week. Doing this will make your goals more
attainable.
3.
Priorities – In budgeting, you will have a
clear picture of your priorities. Many
times we say we want to give more, save more, pay more on our debt. But when you see your budget on paper and
realize what portion is going to those things you say you want verses, cable TV, eating out, frivolous spending, etc.
You will be able to prioritize properly and know what is really
important to you. It will also help you
see in a greater way how much is coming in and where it is all going to, you
will make wiser choices when you see your budget on paper.
4.
You will Save More – When you are aware of the many
categories you have in operating your household, you will be able to make
changes and adjustments so you can save more money. Not only in savings accounts, but I find you
will be more frugal, and look for better ways to spend your money, to help
stretch your dollar.
5.
You will be more organized – When you budget, it is more likely that you know
where your bills are, where your statements are. You will be better prepared for tax
season. I also find as you budget and
become more organized in your finances, this will flow into other areas of your
life. Organizing one thing in your life
will encourage you to organize other areas in your life.
6.
Less Stress – Budgeting allows you to plan and
prepare for emergencies. As you budget
you can build an emergency fund. When
you have an unexpected flat tire, other vehicle repair, house repair, you will
have finances set apart for that. Which
will prevent extra stress in your life.
Going to bed knowing you have a budget in place, will help you sleep
better. You won’t lay awake wondering if
you made that payment.
7.
Happier Marriage – When you have a written budget
your spouse will be aware of your financial situation. You will have less fights over money. As you work as a team and discuss the family
budget your spouse will be aware of what they have to work with for grocery
shopping, clothing shopping, entertainment, etc. Budgeting helps you be on the same page, it
really helps all your relationships, it will help you parent your children
better, you will be able to train and teach them how to handle money. Budgeting at its best is a family affair, not
just one person’s job.
8.
Problem Prevention – I find when you budget and plan
ahead of time, you will have less “emergencies”. You will be aware in advance if there is
something that needs to change, maybe your income changes seasonally. In budgeting you can plan for those
changes. My husband used to be in the
construction industry, with budgeting we were able to budget, plan and prepare
for the winter months, when our income was lower. Have you ever noticed the friend’s in your
life who always have emergencies are not the best at planning, budgeting, and
preparing?
9.
Debt Free Living – The ultimate goal is to live debt
free, when you budget and plan you will be able to pay cash even for large
items. I know some people are going to
finance a car, or finance a larger purchase.
In budgeting you will be aware of how much debt you can actually afford. You will be able to enlist the six month rule
and save and plan for larger purchases, which will save you from making impulse
buys. If you have debt, in budgeting,
you will be more apt to attack that debt and pay it off quicker.
10.
You will have more money – With
budgeting and properly preparing for your bills you will avoid late fees and
interest which will give you more money to work with. You will be able to eliminate or cut back on frivolous
spending, making it seem as if you received a raise. I also have seen as people get there finances
in order, it is very common that they receive a promotion or new job an
increase in their finances.
I
hope after reading these ten benefits of budgeting, if you have not been
budgeting or struggling with your budget, you will be motivated and encouraged
to budget. Remember budgeting is work,
but think about all the benefits you receive as a result of living on a
budget. Remind yourself of all the
different areas it affects: Relationships, Health, Goal Setting, Debt free living,
Promotion & Increase.
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