Why Have A Budget
Why have a budget? We work so we can have more and better. When you think about it, it’s all about what we want. And you work hard for it.
If you want to improve the quality of your life and save more money, you need to use a budget and a spending journal. When using a budget and a spending journal together, you can direct your money to your goals and find places you are wasting money.
A budget is a guide for your money. It’s your money; make the best of it.
Why Have A Budget
A budget is good. It helps you organize your money and enables you to live within your means and set short and long-range goals.
A budget can help make you financially strong and ready for life’s ups and downs.
What Is A Budget
Budgets are your intentions written out. Usually, it’s in the form of a list with amounts written off to the side. This document is your intention of what you will do with your money.
If you make a good budget, all of your income has a category to fit in. I’ve heard some people say they are using a slush fund. Slush funds are amounts of money that have no designated category. I discourage using them.
Objective Of Budgets
The purpose of a budget is to direct your money to the areas of your life that are important to you. We all have short and long-range financial plans. Having a budget will help keep you on track to accomplishing your goals. There are pros and cons of budgeting, but the pros outweigh the cons.
Importance Of Budgeting
Budgeting is important if you want to maximize the use of your money.
A budget helps to keep your eye on the ball.
After you put your budget together, it doesn’t take much time to update it. (Your budget should be updated daily.) You’re able to see where you are financially every day. Because you can see your status daily, you know where you stand financially.
You know what bills are coming up and which invoices have been paid. You know how your short and long-range goals are going.
That’s keeping your eye on the ball. You know what’s going on. You are paying attention, and you know your financial status. It helps to ensure you live within your means.
No one sets up a budget with the intention of overspending. If you are serious about your finances and budget, you will adjust your spending to live within your means. Better Retirement
We have all heard the stories of people that didn’t plan for retirement. Using your budget and spending journal, you’ll find money to cover retirement. It may be a small sacrifice now, but it will pay off in the future.
Gets you ready for emergencies
We can never plan the next emergency, but we can prepare for it. Using your budget and spending journal, you can save money to cover emergencies.
An emergency fund should be six months to a year of living expenses. Shows you bad spending habits
Using a spending journal (daily) and updating your budget daily, you will find where you are wasting money. Instead of wasting money, you can save it in an underfunded category or spend it on something you want or need.
Conclusion
Why Have A Budget? Budgets are necessary for a financially sound and prosperous life.