Why You Need a Budget ASAP!!!

Welcome, I'm so glad you're here...

 Lesson 4:The Benefits of Having a Budget

Budgeting is an immensely important part of managing your finances. Budgeting is simply deciding and planning how your money will be spent to serve your needs and financial goals. Establishing a budget helps you to monitor how you’re spending your income more closely. Doing this also helps you to only spend what is needed. 

 

A budget helps you to be accountable for your money and how its spent. Think of it this way, let’s say after taxes you take home about $1900 per month from earned income. If you don’t have a budget in place, you’ll likely spend most of it on frivolous spending (to include food, activities, clothes, adventures etc.). This behavior will likely leave a small portion to pay some of your necessary bills such as rent, insurance, electric bill etc. This way of spending without a budget will leave you blind to how you’re spending your hard-earned money. You are in a way giving away your spending power for the glitz and glamour. Have you ever gotten paid and you say to yourself omg😲, all the money is gone, what am I going to do for the next 2 weeks? However, if you are budgeting, you know exactly how your money is serving your purpose and financial goals. If not, then you have no clue or control over what your money is doing. 

When you’re using a budget, you can decide how your earned money will serve your financial goals. For example, out of the $1900, you could set aside let’s say $850 for rent, about $300 for other bills (credit cards, electric, student or personal loans), $150-200 for food, depending on family size and using extreme savers skills. After covering your necessary bills, you still have $550 left over for miscellaneous spending. However, my advice is to figure out a debt repayment plan and figure out how you can allocate a portion of that $550 towards getting out of debt. By developing and sticking to your budget will give you clear insight into your relationship with money, your spending patterns. This insight will be invaluable to optimizing your financial success journey. Being aware of your spending habits will give you the ability to change your mindset and behavior towards money. It will help you to minimize any excessive or unnecessary spending. Some additional benefits of having a budget is having less money stressors because you’ll have a clear picture of your money and will be able to better manage it.

Takeaway: It is so important to establish a bi-weekly, semi-monthly or monthly budget based on frequency of pay. If you don’t have a budget, now is the time to establish a budget and start taking charge of your financial journey.

If you found this insightful, please like, leave a comment, share and follow. Thank you for reading, until next time. 

If you found this insightful, please like, leave a comment, share and follow. Thank you for reading, until next time.