Do you ever find yourself with more month than money? Or maybe you get paid every two weeks, but your funds seem to dwindle around day 10? For so many, this is a routine reality. And it’s one of the primary reasons why you need to have a budget.
I know. Budget. It’s a bit of a four-letter word, isn’t it? And yet, it doesn’t have to be. For every excuse why people don’t use a budget, there is a good reason to have one. And believe me, budgets are for everyone, not just people who don’t have much money. Here’s a look at why you need to have a budget, no matter your income.
A budget tells you where your money is going
I don’t care who you are, or what you earn, without a budget, you don’t know where your money is going. It’s so easy, especially in this age of tap-and-go debit and credit cards, to spend without thinking. Before you know it, that tap isn’t working, because suddenly there’s no more money. Trust me, I get it. It’s not a good feeling when you can’t buy a jug of milk at the grocery store, because you thought you had enough …
When you have a budget, you know that you have a certain limit on spending in different areas. For example, if you know your weekly grocery budget is $150, but you decide to host a dinner party for 8 people, there’s not going to be much left.
A budget can help you make decisions
Budgets get a bad rap, and it’s not really fair. Most people tend to think of budgeting the way they think of dieting – as if you have to go without. But in reality, a budget is a tool – a decision-making tool. Much like dieting, when faced with options, you need to make a decision based on your end goals. Let’s face it – eating a whole chocolate cake probably won’t help you with your weight-loss, just as buying designer boots may not help you feed your family. I’m not saying that you can never have dessert or fancy footwear, but you simply may need to decide if that time is now.
By determining where you money will go prior to it landing in your bank account, you help yourself to avoid temptation.
A budget can help you reach your goals
Do you have goals that right now might only seem like dreams? Maybe you want to take a trip to Hawaii with your family? Or you dream of owning your own home, or starting your own business, or buying a new car, or …? That’s awesome! You SHOULD do those things! And the budget is one of the tools that can help you achieve your goals. When you make decisions about how to use your money wisely, you’ll find that you can inch closer and closer to those goals.
Maybe your current goal isn’t to buy or do or see something. Maybe your current goal is to become debt-free. Financial freedom is a WONDERFUL goal, in my opinion, and a sound budget can certainly help you get there. When you know where your money is going and what it’s doing, YOU have the control.
A budget can help you feel empowered
From time to time, anyone can get down on their luck. In a world of uncertainty, worrying about money can really add stress and strain to any situation. I have always found that sitting down with pen and paper (or, in my case – a good spreadsheet) can immediately make me feel like I have more control. I’m not going to lie – I’ve had a budget for years and years and I haven’t always followed it. And when I feel like things could spiral away at any moment, I head for the spreadsheet.
Over the years, my husband and I have created countless versions of our budget, finally settling on a method that works for us. We’ve tried monthly, annual, even weekly budgets, and we eventually landed on a bi-weekly plan that suits our situation and our needs. There are definitely times that I get lax about our finances (hellooooo Spring Shoe Sales!!), and it shows in our bottom line. Nothing makes me feel better about our financial situation than having a plan in place for every payday.
When I left full-time employment to pursue my passion of starting a blog, we knew it would make things a little tight. But we’ve been pretty diligent about keeping up with our budgeting because it was a necessity. Don’t get me wrong – we’ve occasionally lost sight of the big picture along the way, but when we start to feel a pinch, it’s back to the budget we go.
In fact, my husband and I have a standing date that we call our Financial Health Check-In. Every second Friday (his paydays), we pull out the spreadsheet and the bills and check in on our progress. This year, Christmas was a little higher than we anticipated, so we had to talk about what to do. Check out my post on How to Recover When You Blow Your Budget for some suggestions.
So there you have it – in my opinion, these are some of the key reasons why you need to have a budget. You always want to be in control of your money, it shouldn’t be controlling you!
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