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Talking about money and budgets can be a pain point for most people. After my daughter was born, she had six surgeries in her first nine months of life. It was rough. We had bills piling up in the mailbox daily. We were back and forth to the hospital. We had to miss work to constantly take her to the hospital. I cringed every time my phone rang.
I rarely balanced my checkbook, if ever. I was a mess. I didn’t know which way was up and my money and spending were out of control. I might have had $500 in savings. After I started paying attention to my money and creating a budget, my financial life changed.
My husband and I have been able to pay off all of our daughter’s hospital bills, pay off credit card debt, car loans, and have a healthy savings account. Creating a budget is one of the best things you can do for you and your family.
Here are the Reasons Why a Budget is Important & You Need to Create a One Right Away:
Essential to your financial health
Your financial health is important. Having a budget for your money is like getting a preventative checkup at the doctor. You need to do it routinely to see what’s going on and evaluate if you need to do anything differently.
Helps calm your nerves
Having a budget helps reduce your worry, stress, and anxiety around money. When you are all wound up about money and in a constant state of anxiety, you can’t build your financial future. You have to get on a budget.
When you create a budget, you breathe a sigh of relief. You know exactly how much money you’re getting this month and how much is going out. You know you’re covered. You don’t have to worry about your debit card getting declined at the checkout or feeling a pit in your stomach when your login to your online banking.
Identifies bad habits
Creating a budget helps you identify all of your bad money habits. Maybe you spend more than you like on restaurants each month. Maybe you spend a ton of money on impulse purchases. Maybe you spend a small car payment every month at Starbucks.
When you create a budget, you can figure out where your money is going and decide if you want to change it. You can figure out where your pain points are and solve them. If you spend too much at the grocery store, start making a list. If you spend too much at Target, don’t get a shopping cart.
Helps you not overspend
Now budgeting is not a cure-all for overspending, but it can allow you to see where your money is going. When you can see where your money is going, you can decide if you like it or not. If you know you only have $400 a month for groceries, you know you need to not buy a lot of things on your list, because you want to stay under budget.
Having a strict budget can cause overspending. When you have a budget with categories you use and need, you are less likely to overspend.
Having a budget helps you save money. It helps you figure out where you want your money to go including your savings account. It helps you find the places where you are overspending and cut them back, so you have more money to save. Most of the time, you make enough money, you are just blowing it on small impulse purchases or at restaurants.
You can decide to spend less on restaurants and send that money to savings. You can put your savings on auto transfer at your bank so you can save first before you spend. You can put any leftover money from a category into savings if you want. Creating a budget helps you figure out tons of ways to save money.
Creating a budget helps you reach your financial goals. You can figure out what your goals are, steps to achieving them, and a timeline for completing them. If you have a goal to send $500 a month to savings and your current budget only allows for you to send $400 a month to savings, you have to figure out what to do.
You can decrease some other categories to find the remaining $100 in your budget, or you can go out and figure out how to make an extra $100 a month to send to savings.
Reduces Arguments about Money
When you have a budget that you’ve created with your husband, you have less arguments about money. You decide where to spend your money every single month together and there aren’t any surprises. You know how much personal spending money you each have, and you know what you can spend.
Creating a budget and sticking to it creates discipline. Discipline is so important because it helps you achieve your goals. It can help you in more ways than just money.
Discipline is doing what needs to be done, even if you don’t want to do it.
Doing hard things creates discipline and helps you achieve your goals.
Helps you Analyze Your Expenses
Budgeting helps you look at all of your expenses and analyze them. It’s your money. You get to decide how much you want to spend on groceries. You get to decide how much you want your car payment (if any) to be. You get to decide how much to send to savings. When you budget, you get your control back. You are in control of where your money goes. Your money doesn’t control you.
You get to decide if you’re overspending or not. You might want to spend $600 a month on groceries because you have a large family or want to buy organic groceries and another person might want to spend $300 a month on groceries. Both people are right because it’s their money and they get to decide. It’s your money and you decide.
Gives you permission to spend
Budgeting gives you permission to spend. You don’t have to feel “guilty” for going ordering takeout once a week because you know it’s in the budget and your mortgage payment will be paid. Most people think a budget is restrictive, but there is so much freedom in a budget.
Budgeting is so important in helping you achieve your financial goals and dreams. I am a firm believer most people don’t budget because they think it’s too restrictive, don’t want to face the reality of their current situation, or think they have to fit inside a box and have a perfect budget. It’s your money. You get to decide where to send your money each month. Budgeting puts you back in the driver seat of your financial destiny. You aren’t living moment to moment wondering if you’re debit card will get declined.
There is so much power in knowing you are in control of your money and not the other way around.
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