Why Keeping Track of Your Money is a Smart Move
I feel like there’s a common misconception out there that when someone says they’re “on a budget,” it means they don’t have any money. Well, I’m here to tell you that’s not the case. You don’t have to be broke to live on a budget!
There are several reasons you should have a budget, and I’m going to share a few of those with you today!
What Exactly is a Budget?
The dictionary definition of the word budget is: “a plan for the coordination of resources and expenditures.” In other words, it’s a plan for money coming in, and money going out. It’s not a sign that you’re poor. It’s a PLAN to help you stay in control!
But that’s not all! There are several reasons why having a budget is a great idea. Here are just a few of them!
A Few Reasons to Have a Budget
Helps You Save for Something Big
Having a budget allows you to set aside money for that amazing trip you’ve been dreaming of. We were able to live out our life long dream of visiting Ireland without breaking our budget last year.
If a trip isn’t on your bucket list, maybe a house, a new(er) car, or an awesome piece of furniture are some things you’ve been thinking about.
Allows you to build savings for emergencies
An emergency savings is a must-have. Even if it’s $5 per paycheck, I can’t stress enough how important it is to set aside money for an emergency. Having a budget allows you to work in the amount you want to put away, without stressing about how you’re going to do that.
The peace of mind you’ll have when your water heater goes out, or your transmission needs to be replaced, is reason enough to start a budget!
Gives you a sense of security and control
I don’t know about you, but something about seeing my budget on an excel spreadsheet brings a sense of calm over me. It’s right there, in black and white, where my money is going.
There is no wondering, “will I have enough for…” or, “what if I can’t pay…” The amounts of all of my bills are filled in and, based on my budget, I also have fields for fun money, household items, etc. Some weeks the fun money gets a little more padding than household items, and that’s ok!
Just knowing I have a plan makes me feel in control and gives me a sense of security.
Helps curb impulse buying
How often have you seen something you just have to have, and you buy it without thinking twice? That’s called impulse buying, and unless you have cash coming out of your ears, it’s probably not a good idea!
Having a budget lets you see exactly how much money you have after expenses and savings to spend on things you want!
Lets You See Where Your Money is Going
This is an important one. Too many times in my younger years, a few days after payday, I would sit there and wonder where all my money had gone. Little things like grabbing lunch, a few candy bars here and there, and a new dress added up and as a result my bank account was depleted.
Having a budget lets you focus on what exactly you are spending your money on, and allows you to decide what, if any, changes you should be making.
How to Start a Budget
Living on a Budget Overview
- It doesn’t mean you’re being, it means you’re taking control
- Helps you save for a big expense
- Allows you to build a savings for emergencies
- As a result you have a sense of security and control
- Helps curb impulse buying
For professional financial advice, I recommended checking out Dave Ramsey’s resources. They are very informative, and super helpful!
If you have budgeting tips you would like to share, please leave me a comment below!
If you enjoyed my take on why it’s important to have a budget, please check out the rest of my blog!