Hello beautiful people!
Every person could benefit from having a budget they actually stick to, even people who make $100,000+ a year. Budgeting isn’t just for the super frugal anymore. Everybody knows what a budget is and how they work but they never dig deep into the actual reasons why budgeting helps you in ways you could never even imagine.
What is a budget?
Just in case you’ve been living under a rock and don’t know what a budget is, let’s quickly discuss what a budget is and how it works. A budget is a plan that is created for your money. It lists both your total income and all of your monthly expenses and it creates a plan of where you’re going to allocate that money before it all disappears into the depths of cash registers and your couch cushions. A budget will help you plan for the things you need AND the things you want, it just gives you a plan and helps you achieve your goals no matter what they are.
5 Reasons Why You Need a Budget
#1 – Budgeting forces you to have a real conversation with yourself
When you sit down and start creating your first budget you have to really take an honest look at what you can afford and what you shouldn’t be spending your money on.
I’ll admit that a ton of us (including me from time to time) live above our means and lack of a budget is a huge contributing factor. It’s very important to start figuring out where you can cut things from your budget to stop living above your means because it’s only going to hurt you later on and you’ll never be able to have the life you truly want.
During this budget creation you’ll be able to think of all the ways you want to truly improve your life and you can create ways that will help you get to your goals!
#2 – Budgeting (surprisingly) makes you a happier person
Money is one of the biggest stressors in so many people’s lives and giving your money a plan can take so much stress of of you and especially off of your relationship.
So many couples end up fighting about money at least a few times a year depending on their situation and this can be minimized if you’re able to budget and openly talk about money with your significant other.
Less fights = less stress = more happy! 😀
Sticking to a budget reduces stress for a single person as well! We all worry about money stuff on the daily, it doesn’t matter who you are.
If you have a budget, you know exactly how much money you have to spend and you’ll never have to walk up to a cash register and think “is this going to get declined?” when you stick your card into the machine.
#3 – Budgeting helps you prepare for the future
The best part about a budget is that you can take the time to imagine your ideal day in 5 years and work backwards from that. What does your ideal day look like? What kinds of things have you accomplished? You can work all of these ideal situations into your budget.
How do you do that? Well, there are these magical things called sinking funds that allow you to save up for things by putting a small amount of money away each month so someday you can do whatever you want!
If in 5 years you see yourself with a gorgeous downtown apartment and a puppy, you could create a “dog” sinking fund as well as your “first & last months rent” sinking fund. These two things will help you work towards your goal without it making a big dent in your daily life because you’ve budgeted monthly for these expenses!
Another awesome thing that budgeting helps you with is being prepared for unwelcome emergencies. You can budget a certain amount of money each month to go into a specific account that’s just meant to cover those emergencies you weren’t prepared for. Emergency funds can change everything for you and make life so much less stressful.
#4 – Budgeting stops impulse purchases
Budgeting makes you a ton more aware of your purchases which means you aren’t going to grab a box of cookies that you don’t actually need or buy an extra bathing suit just because it’s cute.
You may notice that 99% of stores have really awesome check out lanes these days. They’re filled with cut little trinkets, or snacks, or other things that you get convinced you need when you don’t. Stores are designed to make you spend money which leads to perpetual overspending and you end up in debt because of it.
Having a budget (especially if you use cash) ends up making you think harder about these unnecessary impulse buys. Think of it this way, if you know you’re digging into your grocery budget when you buy that extra bathing suit, you aren’t going to have enough money to eat for the month and it’s going to teach you a real lesson in self-control when you’re starving and eating saltine crackers for dinner.
If you want to learn to be more frugal you should check out our FREE 5 day course called 5 Days to Frugal that will help you be smarter with your money and lead a more frugal life!
#5 – Budgeting actually makes you healthier
The thing is when you start budgeting the first place you’re going to cut (most of the time) is junk food & unhealthy habits.
If you’re a smoker you may try and cut back on your pack a day habit. If you’re a serial snacker, you’re probably going to cut back on the candy (does anyone else love candy as much as I do?).
Budgeting can convince you to be smarter in a bunch of small areas of your life to make you an overall healthier person. It’s pretty crazy what controlling your money can do!
Which budgeting method should you try?
Personally, I have tried every budget in the books and failed a million times. It’s honestly like a diet and excercise regimen, you have to try just about everything until one sticks. The budgeting method that did the best work for me is always the Zero-Based Budget because it’s so straight-forward and it doesn’t leave much room for interpretation.
If you don’t like the Zero-Based Budget you can always try the 50/30/20 budget which gives you a little more wiggle room and could be the answer to all your problems.
Budgeting is one of the absolute best ways you can improve your finances and I highly suggest you start working towards a budgeting system that works for you. It doesn’t have to be perfect but I promise it will be worth it.
Hey! My name is Taylor O’Halloran and I’m a huge fan of saving money any way I can.I’m obsessed with dogs and I love all kinds of cheese even though my stomach hates it. I’m a recent university graduate who just wanted to do her own thing and see what happens! Follow me on the journey!