Do you think you don’t need a budget? Think again. I’m often asked what’s so important about the budget. Is it essential? Today I will give ten reasons why is budgeting important for your financial and mental well-being.
Table of Contents
- What Are The Purposes of A Budgets?
- What Is A Budget?
- Budgeting: Why Is It Important?
- Planning For Retirement: The Importance of Budgeting
- Top 10 Reasons Why Budgeting Is Important to survive life
- You Control Your Money With A Budget
- A Budget Helps You Avoid Buying Unnecessary Items
- Keeping Your Budget On Track Prevents Overdrafts
- With A Budget, You Can Get Along Better With Your Significant Other
- Budgeting Reduces Stress
- Paying off Debt Faster Is Easier When You Follow A Budget
- Setting Goals Requires A Budget
- Having A Budget Helps You Get Rid Murphy
- Saving Money Is Easier When You Live On A Budget
- A Budget Can Motivate You To Earn More Money
For the longest time, I fought the creepy “B” word. I wouldn’t say I liked the idea of being tied up spending $200 on groceries (and having to bring things back when I went). I also didn’t want to say “no” to my husband and children when anything they wanted didn’t fit into the budget.
Unfortunately, often, there were a lot of months left at the end of our money. My husband and I are increasingly arguing about where all the money is going.
The idea of money (especially a shortage) started to keep me awake at night.
I knew something had to be given. So, I initially dipped my toes into the budget pool.
Now, years later, I wonder what took me so long! I can honestly say that learning how to create a budget has (finally) motivated me to pool my finances.
What Are The Purposes of A Budgets?
The main purpose of the budget is to give you control of your money. A budget can help you get you out of your paycheck-to-paycheck cycle and put you firmly on the path to financial success. 3 Key balance sheet objectives: – control personal finances – plan long-term financial targets – determine where expensive (or insufficient) expenditures exist.
What Is A Budget?
Simply put, a budget is a spending plan. It lets you be intentional about how you spend your money. Is the budget for numbers-only nerds or for big companies?
Nope… Even people who hate numbers will benefit from setting up a personal budget.
Budgeting: Why Is It Important?
Budgeting is important because it helps you set and achieve your financial goals. If you want to get out of debt, prepare for emergencies before they happen, and build wealth, a budget can help.
Budget is not only important for good financial health, but it can also benefit your physical and mental health.
Imagine not having more long nights worrying about whether you have enough money in your bank account to last with you all month.
Fewer fights with your wife? Yes, please! Having monthly budget meetings with your partner will help you both access the same page when it comes to finances. This reduces the first topic that most couples argue about.
According to a recent survey by the bank, only 41% of respondents admitted they had a budget
Planning For Retirement: The Importance of Budgeting
Studies show that a shocking number of Americans (33%) have little or no money to retire. This suggests that most Americans need to realize the importance of the budget.
Top 10 Reasons Why Budgeting Is Important to Survive Life
Your savings bank has shown you care. Learn to love budgeting.
You Control Your Money With A Budget
I wouldn’t say I like being told what to do. However, if you live without a budget, you will inadvertently allow yourself to overspend! Do you like it?
Without a budget, Abe, Andrew and Benjamin are in power. They come and go as they see fit without thinking about your financial goals.
Dave Ramsay says to name every dollar. I don’t know about you, but I’d instead call my dollars “debt-free,” “early retirement,” and “financial guarantee” than “remorse,” “guilt’ and” financial slavery “! I can get amen “?
A Budget Helps You Avoid Buying Unnecessary Items
How many times did you go to the store intending to buy one product and end up carrying cargo?
Good news! Living on a budget will prevent you from making propulsive purchases that you will regret later.
When you’re on a budget, you’re forced to stop and think about every purchase and ask how suitable that sale is for your spending plan. If it doesn’t fit, you can leave it in the store… Where it belongs.
Keeping Your Budget On Track Prevents Overdrafts
Banks don’t just let you spend money you don’t have in your account. Who do they think they are?
Did you know the average cost of an overdraft is $35? Most overdraft charges are due to purchases totaling $24 or less!
I don’t know about you, but I think I’d rather the bank refuse to buy it and charge $35 for it. But… I’m digressing.
However, if you have a budget (and stick to it), you already know how much money you can spend. The funding can prevent those bad banks from trying to take your hard-earned money.
With A Budget, You Can Get Along Better With Your Significant Other
Here’s an unflattering fact: 35% of couples regularly argue about money. And don’t make me start on the rise of financial betrayal!
According to a recent poll, 1 of every 5 Americans associated with a relationship thinks it’s good to spend 500 dollars or more without telling others. Among respondents, 6% already have bank accounts and personal credit cards.
I can’t even begin to emphasize how important it is for couples to communicate openly and honestly about all things about money. I spent a long time in my marriage with my husband, excluded from the budgeting process. I am doing so only created confusion, resentment, and anger among us.
These days, although we sometimes disagree, we not only have a budget but also regularly communicate with each other to discuss our family budget.
Budgeting Reduces Stress
I don’t care about stress. Who’s doing this? More importantly, I need at least 8 hours of continuous sleep a night, or I’ll be a bear the next day.
These two things ended up (stress/lack of sleep) being the final straw when my budget dislike came in.
I wouldn’t say the pressures of my money have entirely faded, but they have been drastically reduced since I started making a plan for our money.
Paying off Debt Faster Is Easier When You Follow A Budget
Consider this: Living on a budget lets you focus on spending less than you earn. If you pay less than you make, you have more money to invest in debt.
That means you have a chance of getting out of debt much faster than someone who lives without a budget.
According to a recent study: More than 189 million Americans have a credit card. The average balance on these cards is $8,398 per household.
Setting Goals Requires A Budget
Let’s face it, and we live in a world where being busy and dispersed is a daily occurrence. Is it great to control at least one side of your life?
If you set a target for an emergency fund, the budget could serve as a daily reminder of that vital goal. Without a budget, everyday distractions in life have a chance… Oh, look, squirrel!
Having A Budget Helps You Get Rid Murphy
Does something else that shows up every month seem to derail your budget? Dave Ramsay likes to call it “Murphy visits.” Murphy’s visit is essentially Murphy’s law, which says that if something goes wrong, it usually happens.
Some examples of Murphy’s visit include:
– The hot water kettle breaks down and needs to be replaced.
– The cat swallows (fills the void) and needs to go to the vet.
– Swallow your dog (fill the void) and need go to the vet.
– Your child swallows (fills the void) and needs to go to the emergency department.
– On the way home from work, you drive over a pound and have to call a drag truck.
Visiting Murphy is just a budget camouflage.
Here’s how you can get rid of budget violators:
- It is building an emergency fund
- Learn how to budget
- Living within this budget
Saving Money Is Easier When You Live On A Budget
Do you want the motivation to set up a rainwater fund quickly? Start with a budget. Seriously, once you start hanging out with your money regularly, it will be much harder to get rid of it!
Mainly if you use the cash-in-an-envelope method. Studies have shown that we tend to spend more when we buy with a card than with cash.
A Budget Can Motivate You To Earn More Money
I can personally attest to this point. My husband and I would not have been able to pay off more than $50000 in credit card debt (during the recession) had it not been for the fact that (having finally joined the budget), I sat down, put a pen on a sheet of paper, and realized that if we were going to move our financial needle from red to green, I needed to find a way to raise income.
The way I did this was by starting a side hustle. Does my favorite side hustle? Blogging. But this is a story for another day.
I hope I have convinced you of the importance of the budget. While living on a difficult budget can be in the short term, in the long run, having only a fixed spending plan improves your quality of life.
Importantly, sticking to the budget helps you live less than you make, which is the (unclassified) formula for building wealth.