Money From A Budget

You Need A Budget!

Do you have a budget? If not, you are missing out on one of the most important financial tools available to you. Take a look at some benefits to having a budget and then start one of your own.

1) A Budget Aids Responsible Spending

When you have a budget, you have a roadmap for how you will spend money over the course of a month. A good budget will track your spending down to the dollar, so that no money is wasted. While this might sound like more detail than you need, it is quite beneficial to your financial health.

Without a budget, you will probably have a general idea of how much money you can spend on things like entertainment and food, but nothing definite. This can lead to overspending and may even cause you to live paycheck to paycheck.

This is no way to live a life. No matter what your income level is, you should be able to formulate a budget that stretches your income out over the course of the month and even allows for saving. If you are stuck living paycheck to paycheck, a budget will help.

2) Budgets Help You Reach Financial Goals

You may have financial goals but, without a budget, your odds of reaching all but the simplest of them are slim. Without a budget, it will be hard to save for a vacation, pay down debt and retirement becomes a real problem.

Budgets help because they allow you to break up your financial goal into reasonable chunks. For example, if you want to save 6000 dollars for a family vacation, you might be at a loss as to where to start. This is a very large amount of money after-all. With a budget, you can simply take the time until the vacation and come up with a monthly savings target. If the vacation is 12 months away, simply budget 500 dollars a month for savings.

With this savings goal in mind and noted, you can then adjust other budget categories and balance your budget. Your budget will help you find the money for your vacation by taking from other areas.

3) That Budget Will Help You Manage Bills

A budget will list every expense, allowing you to keep track of what bills you need to pay. When it comes time to pay your bills, simply look at you budget and go down the list paying them. It simplifies the process and makes it easy to not forget anything.

Without a budget, it is far too easy to miss a bill or payment. You could forget to make a credit card payment or fail to pay for your cell phone service. This can cause a number of problems from service interruption, to late fees and can even cause credit rating issues if you fall behind enough.

4) Budgets Make You Financially Comfortable

Ever wonder if you have enough money to pay for something or stress about the future? A budget can help take stress away from your life because it can visually show you that you are on track financially.

Once you make a budget, and then balance it, you will be able to see that you do in fact make enough money to reach your financial goals. If it shows the opposite, you have the tool that you need to change this and get on the right financial track.

Having a budget that shows you that you are doing well financially is much more reassuring than simply guessing whether your money is doing okay.

5) Budgeting Allows You To Get Out Of Debt

The average American has well over 6000 dollars in credit card debt. Getting out of this debt can be a daunting task, but a budget can help.

Your budget will have all of your expenses listed, including those minimum credit card payments. When you see all of your minimums lined up, you realize just how much money you are spending each month to simply maintain your cards in good standing. Seeing the total dollar amount can be motivating, because you realize just how much money is involved and can probably visualize a better way to use it.

Once you get motivation from your budget, you can put a plan into action. Set aside a set amount of money each month (above your minimum payments) that will go towards paying down principal. Then, balance your budget by making cuts in other areas.

Having a debt reduction category in your budget will ensure that you eventually get out of your credit card problems.

Now Go Write That Budget

These are 5 good reasons that you need to have a budget. And, although there are plenty more reasons, this should be enough to encourage you that a budget is something you need urgently.

If you dread getting started because you fear that it will be too difficult, you should know that making a budget is not as difficult as you might think. It really can be as simple as having all of your bills and expenses listed on a piece of paper. Just make sure that you include every bill and categories for more variable expenses like food and entertainment.

Should you find yourself struggling to list all of your bills and expenses, simply get a small notebook to use as a journal. Then, take this notebook with you everywhere you go for at least a week, but up to an entire month. When you are done, you should have good awareness of where your money is going.

To make things even easier, put your budget into a simple spreadsheet. Having rows and columns that automatically update will make it much easier to see how changes affect the bottom line.