Having a budget is so important. How can you manage your money if you don’t know where it’s going? A budget is the foundation of financial fitness. Though it sometimes may seem futile, having a budget is the game changer we all need for our finances. As the saying goes… Fail to Plan, Plan to Fail.
A budget is a written account of the coming and goings of the money. Telling your money where to go is the most important thing you can do with it. Money management is the major key to championing your finances.
For far too long, budget has been the nasty “B” word we don’t want to talk about in public; we are getting away from that.
Our new favorite B word is Budget!
Here’s 5 Reasons Why You Need a Budget
Learn Where Your Money is Going
Having a budget puts your spending habits right in your face. This is a large component of taking control of your finances. Most of us spend without thinking. In the age of the swipe and online shopping, spending money has never been easier. Without a budget it is hard to ascertain where the money is going. By creating a budget, you are able to allocate your money to certain areas. The process of creating a budget is an eye-opening experience, you begin to realize what you spend your money on. Give every single dollar a job and tell it where to go. Take control!
Once you know where your money is going you can find ways to save. Saving money that you didn’t realize you were blowing is the true gem of budgeting. When you realize how much money you are spending on nonsense you can buckle down, change your habits, and start utilizing your money on the things and experiences that enhance your life. Cutting out frivolous spending and making your money truly work for you is the name of the game. Stop wasting money on things that hold no value.
Prepare for the Unexpected
I prefer the term No Touch Savings, however you can call it whatever you want, Emergency Fund, Rainy Day Fund, Buffer Account, but you need to set some money aside for the unexpected events that life throws at you! This is a separate stash of money that you have tucked away for hard times. The peace of mind that you attain knowing that if something comes up you are prepared is priceless.
Focus on Your Goals
Setting a budget helps you focus on your goals. In order to make your goals a reality we have to make them specific and measurable. Having a budget allows you to set a goal, track it and see it through to fruition. Very few things in life are completely free, creating a line item in your budget for specific goals keeps you focused and accountable.
Live Your Best Life
Having a budget gives your control of your money, thus giving you the freedom and funds to live your best life. Getting a grip on your money frees you up from the stress of wondering where it went. Not stressing about money releases your energy to flourish in financial peace.
Contrary to popular belief being on a budget has very little to do with how much money you have or make. It is simply about managing the money. We must dispel the myths around budgeting and get into it. It doesn’t matter if you make $500 a month or $5,000 a month you NEED to budget! Those that have amassed great wealth know the value of a clear budget. Budgeting is more about ratios and percentages than amounts. Allocating your money to different areas no matter how much or little you make is essential to being successful with your personal finance.