Life is today’s society can be expensive. The cost of bills, groceries, clothes, items breaking, eating out, leisure, etc. leaves little room for extra money every month. A budget is a plan for how money will be allocated. Though a budget will not be set in stone, it is beneficial in aiding in responsible spending. Though money does not buy happiness, not having enough money can put a major strain on your mental healthy. Budgeting offers many benefits and may be the solution to the most common money problems.
Four Benefits of Keeping a Budget
1.Puts You in Charge, Not Your Money
Money is powerful and seductive. Whenever you have money in your hand, you are naturally inclined to spend it on the first appealing good or service in sight. Keeping a budget allows gives you the power, not your money. A budget provides you a visual on how your spending will work out. A budget can show you where you can cut down costs (e.g. switching to cheap renters insurance, cutting down on TV channels, using less electricity, etc.) Many people do not think “just one cup of coffee” or “one fast food lunch” will not make a difference, but when they have it laid out for them, they see that it quickly adds up and contributes to a lack of funds. Seeing your budget will suddenly make you question if a short-term joy (e.g. McDonald’s lunch, fancy coffee shop drink, extra bracelet on the clearance rack, etc.) is worth sacrificing a long-term luxury (e.g. vacation, new house, children’s education, etc.).
- Prepares You Better for an Emergency
Life is like an animal; it has a mind of its own. Items break, accidents happen, jobs are lost, injuries happen, illnesses come about, and even loved ones unexpectedly pass away. An emergency fund is always necessary for situations when life takes on a life of its own, and it should be funded regularly. A budget can help you allocate money to be put away for emergencies.
- Helps You Take Out the Appropriate Amount of Debt
Credit cards and loans help people buy items that they would almost never be able to afford otherwise. However, the freedom that taking out debt provides comes with great responsibility. Many people get into the trouble of taking out more debt than they can pay back, which greatly restricts them and makes future loans more expensive. Budgeting can help you determine the amount of debt that you absolutely need to take out; therefore, you will not end up slapping down the credit card every time you cannot afford something. You will only end up taking out debt when necessary and only the amount that you can pay back.
- Improves Relationships
Let’s face it: money is the root of all evil. Many relationships are strained or end over money problems. Having a budget makes it easier for people to communicate about money in a calm, finesse manner. While a budget is not a guarantee that one party will go against it, it provides more order in how a couple spends money if they both follow it. If the couple is arguing about who spends money more money, a budget can reveal the real culprit.
Budgeting is the Anchor to Life
Budgeting, if planned correctly and followed according, can solve many issues that are related to money. Keeping a budget can prevent you from getting carried away with every dollar that you have. Emergencies can be less daunting because you will have the money to be prepared for them. Debt is the most common issue people run into with money, but a budget can help you take out less debt and only the amount that you can pay back. A budget can also prevent money conflicts between you and your significant other. If you want to live a life where money is not as much of a burden, budgeting is the way to go.
