Everyone knows the need to budget. Knowing what comes in to what goes out determines the level of future wealth and happiness. But making a start isn’t easy. Much of the problem lies in the inability to see how creating a budget today will create a better future when the future is uncertain.
There are no guarantees that a budget will lead to wealth and happiness. Things do happen to derail the best of plans. Fear and doubt stand in the way. There doesn’t seem to be enough motivation to stick to a budget nor time until the budget produces consistent and positive results.
But if you need a few good reason why you should make a budget, here are ten of them:
1. Budgeting acts as a road map to monitor your progress. It’s your foundation that tells you if you’re headed in the right direction or if you need to make course corrections. Your budget gives you clear guidelines to follow.
2. A budget helps you control your money better. Most people simply don’t know where their money goes. They spend indiscriminately. The money may go toward the necessities of life, but too often goes toward unnecessary expenditures. But you can’t know that without a well thought out budget.
3. It helps to enforce fiscal responsibility and discipline. You needed patience and discipline to go through the many years of schooling before you graduated in the profession of your choice. That same discipline is necessary when it comes to handling money responsibly. But few people ever employ it as they did with their education.
4. A budget becomes a benchmark, a true reflection of where you are financially at any given moment. If you’re not living within your means, your budget will inform you of the need to make some changes. In today’s world of easy credit, it’s easy to spend more than you make and a budget will tell you so. A budget gives you a needed reality check from time to time.
5. A budget can help you reach your financial goals sooner. Saving becomes a priority. It’s more exciting to see large positive figures on the balance sheet than negative figures reflected in credit card bills.
6. It helps free up cash for those more important things like building an emergency fund or increasing the retirement fund. Shaving costs on groceries by using coupons or taking advantage of specials and discounts leaves you with spare cash that can go to investments that create more wealth.
7. Budgeting can become a game for every member of the family. Every member can increase their wealth by proving to the others how well they saved as opposed to what they spent. This helps unify the family unit. The family that saves enjoys the fruits that comes from saving as a team.
8. Few people are prepared to face emergencies. A car breakdown, a sudden illness in the family, required home repairs and even those endless increases in taxes and prices throw many families into a financial tailspin. As no money was budgeted, the only recourse many have is to use credit. Unfortunately, those high interest rates lead to deeper debt.
9. Today’s man and woman holds as much as 8 credit cards. That adds to a lot of easy purchases and far more debt than they can handle. A budget helps keep you falling into that trap. It helps keep you away from incurring too much debt. If you are in debt, a budget will show you a way to climb out of the hole.
10. Most divorces stem from financial problems. A budget tailored to the needs of the husband, wife and children mean less surprises. Creating a common budget builds communication skills. Everyone becomes focused on the same goal and that helps cement the relationship of everyone in the family. A common goal means less arguments about money and better use of both money and time.
These ten reasons are enough to get you started on creating a budget. If you haven’t started, review the reasons and how they can lead to a better future for you and your family. All that’s left is to take immediate action. Eventually you will see positive results.