You might be thinking “yes, mother!” after reading the title of this post but I promise you that having a budget is worth your time.
It really can be easy to do and budgeting is not about depriving yourself (I would never ask you to give up your Starbucks fix if it makes you happy!).
In fact, budgeting will allow you to remove or reduce any unnecessary expenses so that you can spend your money on something that makes you happy and reflects your goals and values.
I will tell you how I budget step by step in another post.
For now, let’s take a look at why any of us should bother with a budget.
1. To Gain Control of Your Life
Have you every dreamt of quitting your day job to start a business or become self-employed? Retiring and traveling the world? Owning your dream home? Or do you just want to get your head above water or be able to afford that one item you have had your eye on?
The first step to achieving any of these things is to take charge of your finances.
- You will be amazed at what you can accomplish by controlling your money and making it work towards achieving your goals and priorities rather than just randomly using it as expenses come up.
If you are serious about achieving your dreams and pursuing what you want out of life a budget is going to be a critical part of that process.
2. You Can Become Debt-Free
Imagine if you could use all the money that is currently going towards your credit card payments, student loans, and car payments to boost your savings or towards achieving your goals.
Becoming debt-free may take a bit of time and a bit of strategy (more on this in an upcoming post) but it is totally achievable.
A quick Google search will show you real stories of people who paid off massive debts and are now doing amazing things.
I am paying down my last debt (my car) and it feels pretty awesome.
Saving money becomes like a game. You will find yourself thinking “If I can just shave x amount off of this, I can reach my goal x months sooner”.
Becoming debt free is a journey you can start today by making a budget.
3. Save Consistently
By making a budget,you can automate savings for retirement, holidays, or emergency spending effortlessly.
Treat your monthly savings like a bill you need to pay and you will be surprised at how much you are able to save without much effort.
4. Understand Your Spending Habits
You may think you know how you spend your money, but you may be surprised.
If you track every purchase for a few months, patterns will begin to emerge.
For me, the amount of money I was spending on eating out was shocking and just plain crazy.
I’ve been cooking at home more often as a result and have saved so much money while also improving my health.
You may find that it makes sense to buy your own espresso machine with all of the money you are spending on your drink of choice, or if you love to shop you might give local thrift store a try for a fraction of the cost.
In any case, having all of your expenses laid out in black and white will empower you to make any changes you want or need to.
If you are living paycheck to paycheck or your savings are a bit low right now, a budget will help you get in control of your finances.
Don’t let an unexpected car repair or even a layoff devastate you financially. This is another reason it really pays to plan ahead a bit versus winging it.
If you plan on retiring, investing and saving are pretty much non-negotiable, right?
7. Be Happier
Have you ever fought with someone you love about money?
- Money can certainly cause stress and put a strain on all sorts of relationships.
With a budget and a plan, you can rest easier at night knowing you are on the right track.
- Even if you have debt or are struggling right now, having a plan can improve your outlook and make things so much easier.
8. Be Healthier
As you embark on your budgeting adventure, you will be more aware of the choices you are making.
Water is cheaper than soda and the joy of cooking at home starts to seem more appealing than a greasy, costly meal from a fast food place
9. Stop Impulse Purchases
Have you ever looked around your house and realized that everything you own used to be money?
- That nail polish you never used, whatever is stuffed in that closet or your junk drawers, clothes you don’t wear, etc.
As you track your expenses, you will naturally be less inclined to purchase things on impulse.
- Money you don’t need to spend could be better utilized by saving it or paying off a debt.
If you want something now, wait a month or two. If you still want it, see if you can get it secondhand or cheaper somewhere else.
With your budget and your goals laid out in black and white, the true cost of impulse purchases becomes apparent.
There is nothing wrong with treating yourself, but this should be a part of your budget.
10. Simplify Your Life
With a good budget, you won’t need to stress about when bills are due or whether you can afford new tires for your car.
You will be saving for upcoming expenses, and you will have enough money in your account for your recurring expenses to go through effortlessly.
You can take back all the time you used to spend wondering if you were going to make it through the week and constantly checking your bank balance and do something for yourself.
Read a good book, get outside, enjoy your life.
Now that you’ve gotten into the right mindset by knowing all the benefits of setting up a budget, actually getting it done will be nothing you can’t handle.
This post will walk you through the process painlessly.
I’d love to hear your thoughts about the myths surrounding budgets or your experiences budgeting in the comments.