5 Reasons To Have A Budget
Budgeting has a bad reputation, it is kind of like the dieting of the money world. It’s often thought that we need to fit into a certain mould, that tells us how we need to spend our money, which will feel restricting. However, budget is so much more than that, so here’s my 5 reasons to have a budget, even if you feel like you don’t need one!
What exactly is a ‘budget’
Budget is often associated with restricting yourself and not being able to allow yourself anything fun, which is why we shy away from it.
But in reality, budget is actually just a plan for how to spend your money.
And guess what? YOU get to choose how you spend your money!
Now I’m not saying that you never need to compromise or make sacrifices. I’m just saying that you get to choose what you compromise on and what you sacrifice.
(To a degree of course, most of us have mandatory expenses like housing and utilities.)
Your budget, or your spending plan, will help you reach your financial goals, which is the main point of it.
If you’re not sold yet, here are 5 reasons to have budget!
1. Accountability
The best way for a budget to work is to have written down, either on paper or on the computer.
This gives you accountability, as you are really confronted by your spending with real numbers, compared to what you think you spend, or would like to spend.
With this knowledge you can either adjust your budget to be more realistic, or see patterns in your spending that you can work on changing to reach your goals quicker.
2. Clarity
Writing your budget down gives your clarity on what your lifestyle is actually costing you.
You can clearly see where your money is going and what you need to do to get to your financial goals.
With this knowledge you can make a realistic plan to reach those goals and monitor your progress.
No more guessing or or vague anxiety over your financial situation! You can clearly see where you are, and what you might need to change to get where you want to go.
3. Values
Looking at where your money is really going can be a wake up call into how your money is disappearing into mindless spending that doesn’t align with your values.
Creating a budget and monitoring your spending allows you to consciously choose HOW you want to spend your money.
For example, you look at your bank statements and notice you have multiple streaming subscriptions. When you really think about it, you realise you only need one and cancel the others. There’s immediately more money to spend (or save) on other things that you would enjoy more!
4. Control
Do you feel out of control with your money? It can create a lot of stress in your life.
Creating a budget and tracking your spending will immediately give you control.
It won’t fix everything straightaway but it gives you an understanding of where you truly are at financially, and from there you can make a plan to get where you really want to be.
Having a plan to control your spending will give you the feeling of control back and that will decrease the financial stress in your life.
5. Reaching financial goals
Budget is an essential tool in reaching financial goals.
It will allow you to spend according to your values and helps you see where you can cut down to put more towards your goals.
If you are really determined you will be able to see what you need to do in order to get to your goals as quick as you can.
Budget can also help you get creative, especially if you have very limited resources, or high expenses that you can’t (or simply don’t want to) cut down.
By getting creative I mean that you can see how much you need to increase your income (beyond your main job) to get to your financial goals, instead of just cutting down, because let’s be real, sometimes you just can’t cut down any further!
If you’d like to have a read about my personal budget and how it is evolving, you can find my latest finance check here.
Do you use a budget? What are your favourite reasons to have a budget? Let me know in the comments!
