Budgeting can definitely be a chore. And if you’ve never created one before you may feel intimidated. But the benefits of budgeting far outweigh the downsides. If you wish you knew where all your money went, are tired of feeling out of control of your money then budgeting is definitely the first thing you should do. We have tons of tips and advice for creating a budget, so today, let’s talk about 4 benefits of budgeting. Regardless of how much money you earn, or how many bills you have to pay, a budget will seriously improve your life. Here’s how.
- A Budget Reduces Stress & Uncertainty
If you find yourself unsure if your rent check is going to clear, or if you should have bought that new bag you’ve been eyeing, chance are you need a budget. Like, yesterday. A budget is just a map or guideline for how to spend your money. You won’t have to worry about if you’re going to make rent, or if you will regret making a purchase in the future because you will have anticipated everything you can and set money aside for everything you can’t.
- A budget Shows You Where You Waste Money
The first step in creating a budget is to categorize your spending for the last few months. This step is vital because you will be able to get a crystal clear picture of what exactly your money is spent on. From there, you can estimate how much you actually need to spend in each category. The honest, hard cold truth in this step can sometimes hurt your feelings. Its much more comfortable to live in denial. If you think, “Eh, I don’t eat out that much” Seeing a $400 restaurant bill is going to hurt. But this is the kind of honesty you need. If you see that you waste a ton of money in one category, you’ll see that you actually can afford to save more money, plan for vacations, or move to a new apartment.
- A Budget Puts You in Control
Does this scenario seem familiar to you?
Your friend: “Want to go get drinks this weekend?”
You: “IDK, let me check my account. Maybe!”
Your Account: “LOL no.”
You: “no…. Maybe after payday.”
Who is in charge here? Your account is! It should be the other way around. When you have a budget, each time money comes into your account, you can set aside $20 specifically for getting drinks with your friend. Then you don’t have to ask your bank account for permission before you do anything. You already know what you’ve planned for! Boom.
- A Budget Helps You Reach Your Goals Faster
Since a budget is really just a plan for your money, you can consider it part of your plan to help you reach any goal. Regardless of what your goals are, a budget will help! If you want to save more money, travel more, pay off debt, eat at fancier restaurants, quit your job, buy a house…. Anything! You need money and you need a plan. Add in a line in your budget for each of your goals, and watch your dreams come true.
So, what has budgeting helped you achieve?