Ten Benefits of Budgeting

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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