I’m sure you’ve heard of budgeting, but do you ever find yourself wondering why you would need a budget? Isn’t good money management as simple as just being careful where you spend your money? Maybe not. Here are 5 reasons why you need a budget.
This is a guest post from Ashley of BudgetsMadeEasy.com.
Hi, I am Ashley from BudgetsMadeEasy.com. I teach people to budget so they can save money and pay off debt. When you are able to take control of your money and pay off debt, you can start living your dreams!
I paid off $45,000 in 17 months including $25,000 in student loans in just 10 months. I did all this while working as a police officer. I didn’t have an extravagant income.
What I did have was a budget and a plan. If I can do it, so can you!
There are so many reasons that you should have a budget. I have listed out my top 5 reasons.(THIS POST MAY CONTAIN AFFILIATE LINKS FOR YOUR CONVENIENCE. YOU CAN READ OUR DISCLOSURE POLICY HERE.)
What is a budget?
A budget is simply making a plan for your money. You should write it down and prioritize what gets paid first.
A budget is simply telling your money where to go to further your goals.
A budget can even be fun! Yes, it can be fun. You know why? Because you get to have fun with your money without feeling GUILTY!
Why do I need a budget?
Decide what your “why” is for managing your money. Make a visual of it and put it everywhere.
Put in your bathroom so when you are getting ready in the morning you see it. Put it in your wallet so when you are shopping, you see it.
Want to travel? Put pictures of the places you want to go.
Want to stay at home with your kids? Put pictures of your kids everywhere.
Want to be debt-free? Make a visual of the debt you have to pay off. Then mark it off as you pay it off.
Want to save for Disney? Make a visual and mark off amounts you have saved.
You only have so much money and you have to decide what is important to spend it on and what isn’t. You have what you have and you have to prioritize it.
It’s that simple. A budget isn’t good or bad, it is what it is.
Can I still have fun on a budget?
YES! A budget is simply a plan for your money. If having fun or a certain experience is a priority for you, then put it in the budget. Does that mean that you should spend $200 partying every weekend?…. No, but that doesn’t mean you shouldn’t have any fun ever.
The great thing about having a budget is that you can have fun without guilt. You don’t have guilt for the next month or 6 worrying about the credit card bill from it.
You put whatever you want to do in the budget and work around it. It’s all about priorities.
5 Reasons Why You Need a Budget
I want you to be able to stop living paycheck to paycheck so that you can do all the things you want to do but can’t right now.
Do you want to stay-at-home with your kids?
Do you want to travel?
Do you want to retire?
It is all possible and it all starts with a budget.
1. STOP LIVING PAYCHECK TO PAYCHECK
The first and almost immediate benefit of having a budget is that you can stop living paycheck to paycheck. It gives you the freedom to control your money.
When you start budgeting your money, there is more to go around. Most people say that it feels like they got a raise!
Your money doesn’t disappear in small amounts here and there and more of it carries over to the next paycheck. You then can stop living paycheck to paycheck.
2. STOP THE OVERDRAFTS AND LATE FEES
When you do a budget, you stop having overdrafts! It is easier to keep track of how much you have and where it is going and when. When you have a plan for your money and stick to it, you get to pay your bills on time without overdrawing your account.
Overdrafts and late fees are just wasted money. When you have your written budget, you know when things are due and can avoid late fees!
3. SAVE MONEY
With a budget, you are able to see where your money has been going and it gives you more control to save it! This helps you actually save money.
It is harder to let it go when you see every dollar on paper. I highly recommend having a written budget as it becomes more real.
This will make you more likely to stick to it, save money, and cut expenses. Once you see how much you are spending on certain categories, you will be more willing to take action and reduce the amounts.
There are lots of ways to save money but it starts with being intentional with the money you already have. Once you do that, you will find it so much easier to save money. You won’t be spending money on things that are not a priority to you. This will help you save money on all kinds of things.
You will be more intentional when shopping, monthly expenses, and saving for emergencies. If your priority is saving for an emergency, then put it in the budget.
If you want to save money on groceries, then cut down the food budget. Stop eating out so much and stick to the budget for eating out.
4. KNOW WHERE YOUR MONEY IS GOING
When you do your budget, you know where your money is going. At first, this is usually a shock and can help you save money because you can see the ridiculous amount of money you have been spending on stupid stuff. (or was that just me? lol)
When you know where your money is going, you are able to save money and stop living paycheck to paycheck.
As Dave Ramsey says, a budget lets you control your money instead of your money controlling you.
When you know where your money has been going, you can prioritize your spending and start telling it where to go instead. This will help you achieve your goals and plan for your future.
When you don’t have a budget and are just spending whatever is in the account or more, your money is not serving you. What I mean by that is, it is not making your life better. It is in reality probably making your life more stressful.
When you take control of your money, it serves a purpose for you. It reduces stress, and works for your goals instead of having nothing to show for all your hard-earned money!
5. PAY OFF YOUR DEBT
When you manage your money, you can actually save it AND pay off your debt! You will have money left over and will be able to put it toward your short-term and long-term goals, like becoming debt-free.
Debt doesn’t have to be a way of life forever. It is possible to become debt-free and stay that way. I was able to pay off $45,000 in 17 months while working as a police officer. It all started with a budget!
Seriously, once I did a zero-based budget and SAW all the money we had been spending on stupid stuff, I was shocked. This motivated me to prioritize our money to go toward our goals, like paying off debt.
How can I budget with a low income?
Budgeting doesn’t depend on your income. You should have a budget no matter how much or how little you make. When you have a low income, it is even more important for you to make a budget and stick to it because you don’t have as much of a buffer.
If you mess up the budget or don’t stick to it, you are more likely to overdraft your account and get even more behind.
A budget is simply prioritizing your money. So even with a low income, list out your bills that are the highest priority or the most important. Pay those first, then move down the list. Debt always comes last. Food, shelter, and transportation always come first.
A budget lets you prioritize your money so you can achieve your goals. Whatever those goals may be. Want to travel more? Budget it in! Cut expenses in other places so your money can go into a travel fund.
Want to stay-at-home with your kids? Prioritize your money toward saving or paying off debt. Look for ways to cut expenses, make some extra money, and start selling stuff. If you want something bad enough, you will find a way to make it happen.
I find that people “wish” for a lot of things but don’t actually take the initiative to look into how to get there. Your budget is the start to getting there. Then if you need more money to make it happen faster, find some ways to get there. There are legit online jobs, work a part-time job, cut cable, cut expenses, cancel memberships you don’t need.
A lot of things in our society are luxuries but people act like they are necessities. Decide what is a luxury in your life and if it is standing in the way of your dreams, cut it out.
Find your “why”, put it where you can see it every day and go do what needs to be done to get it.
Do you have a budget? Did this reasons why you need a budget post finally convince you that budgeting your money is a much safer and more permanent option than just hoping and wishing for success with your finances? I’d love to hear from you and to hear your reasons for why you need a budget!
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Hi, I am Ashley from Budgets Made Easy. I teach people to budget so they can save money and pay off debt. When you are able to take control of your money and pay off debt, you can start living your dreams!You can find Ashley on Facebook or Pinterest. She helps people budget, save money, and pay off debt so they can live the life they want.