Hello and happy Monday!
It is a happier Monday than normal given Christmas is this week!
I find a lot of people think a budget isn’t necessary for them. They’ve got things under control despite 79% of Americans living paycheck to paycheck.
So for that reason, here are 7 reasons I believe budgeting is essential for everyone! I also posted a video on this earlier today.
But here we go for the more written word focused individual.
7 Reasons You Need a Budget in 2021
1. A budget helps you be proactive instead of reactive with your money. It gives you control.
John Maxwell, a big name in the leadership world and one of my personal favorite authors, said this,
“A budget is telling your money where to go instead of wondering where it went.”
– John Maxwell
Have you ever wondered where your money went by the end of the month?
“No no no, that account had 4 digits in front of the decimal 2 weeks ago.”
If so, budgeting is for you!
Budgeting is a proactive approach to your money. If you have financial goals or even just an inkling of where you want to be with your money in the future, you’d rather make those moves yourself instead of reacting to life with your money.
Time to be in control.
2. A budget protects your future and helps you achieve your financial goals.
Okay, it’s debatable if this is any different from the first one but I’m counting it.
Close your eyes, look to the future and tell me what you see. What are your retirement dreams you are envisioning?
Budgeting every month is a sure fire way to hit those goals.
3. A budget gives you freedom instead of restriction.
I mentioned this recently but I don’t think Bailey and I would eat out much if it weren’t for our budget. I would feel guilty every time we ate out because of where that money could go otherwise.
But since we have a budget, we are given permission to go out to eat.
Guilt free.
Do you feel guilty whenever you spend money? A budget will actually give you permission to spend money guilt free. Just do it responsibly.
4. A budget keeps your money in check.
Unfortunately, finances is just a big math problem. But not one of those crazy, Jim-walked-into-the-grocery-store-and-purchased-27-watermelons math problems.
Quite a summer party, huh Jim?
You have income, you have expenses. Your expenses MUST be equal to or less than income. Otherwise, the answer to the equation is debt and interest owed. And that is not a sustainable answer!
A budget will help keep your money in check and help you keep the income higher than the outgo.
5. A budget reduces stress.
Have you ever worried you wouldn’t have enough money in your account to pay the mortgage or the credit card bill when it comes due? A budget will give you confidence there is enough money there!
Like what I was saying about the income to expenses ratio, if you know for a fact there is more income than expenses, that’s a huge stress reliever.
And then you can sleep better at night. It’s a lot easier to count sheep when you aren’t counting dollars.
6. A budget helps you prepare for hard times.
2020 was one big, gigantic hard time. People getting sick, losing jobs, what a disaster! By having a budget, you’re able to prepare for those times by curbing your spending and saving more for emergencies.
Why not ensure that you are in as good of a financial position for 2021 as possible?
7. A budget shows your priorities (and helps you correct them).
Zig Ziglar, a well known author, once said,
“Show me your calendar and your checkbook, and I will tell you what is most important in your life.”
– Zig Ziglar
This is the same with a budget. If you look at your budget, it will show you what’s most important to you. This might be scary and you will have to potentially deal with some shame of where you put your money.
“We spent how much money on chocolate milk this month??”
But it’s vital you do it! Let it awaken you to change your financial ways! Let it spur you into better money habits!
And that’s my list!
You may have a poor view of budgeting but if you can just give it a shot, I promise it will pay off. Maybe even to the tune of a million dollars if you start investing.
So here’s my question for you: if you budget already, What are the benefits of a budget you find for yourself? Did I miss any?
Comment below and let me know!
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