If you’ve heard it once, you’ve heard it a thousand times:
CONTROL YOUR MONEY!
Financial experts and money consultants have shouted this mountain mantra for years.
So far, you’re probably sick of hearing the word “Control.” What a pity. This is just one of those financial lessons that can not be nailed down enough. Especially in today’s turbulent economy, budgeting is more important than ever. If you and your family want financial security, following a budget is the only answer.
Still not convinced? Here are six good reasons why everyone should create and maintain a budget:
This helps you to keep on your goals
A budget helps you to discover your long-term goals and work with them. If you simply drift aimlessly through life, throwing your money at every beautiful and shiny object that gets your attention, how will you save enough money to buy a car, make your trip to Paris or put the payment on a property?
A budget requires you to outline your goals, save your money, track your progress and make your dreams come true. OK, so it can be difficult when you realize that the new Xbox game or the magnificent cashmere sweater in the store window does not fit your budget. But when you remember that you are saving to buy a home, it will be much easier to turn around and leave the store empty-handed.
2. This ensures that you do not spend money that you do not have
Many consumers spend money they do not have – and we can owe everything to credit cards. Before the age of plastic, people knew if they were living within their means. At the end of the month, if they had enough money to pay the bills and buy some things. Nowadays, people who abuse credit cards excessively do not always realize that they are spending too much until they drown themselves in debt.
However, if you create and maintain a budget, you will never find yourself in this precarious position. You will know exactly how much money you earn, how much you can spend every month and how much you need to save. Okay, the cruel numbers and budget tracking are not even as fun as a series of shameless purchases.
3. This leads to a happy retirement
Let’s say you spend your money responsibly and never carry credit card debt. Good for you! But are not you forgetting something? As important as spending your money wisely today, it is also crucial to think about your future.
A budget can help you do just that. If you set aside a portion of your earnings each month to contribute to your retirement fund, you will be securing your future. Although you may have to sacrifice a little now, it will be worth it. After all, would you rather spend your retirement sitting on the sand of a beach or working as a colleague at the local supermarket to get to the end? Exactly.
4. This helps you prepare for emergencies
Life is full of unexpected surprises, some better than others. When you get fired, get sick or have an accident, go through a divorce or have a death in the family, this can lead to serious financial turmoil. Of course, it seems that these emergencies always come at the worst possible time – when you’re already in need of money. This is exactly why everyone needs an emergency fund.
Your budget should include an emergency fund that consists of at least three to six months of living expenses. This extra money will ensure that you do not reach the depths of debt after a life crisis. Of course, it will take time to save three to six months of living expenses. Do not try to dump most of your salary into your emergency fund immediately. Turn it into your budget, set realistic goals and start small.
5. Clarifies poor spending habits
Building a budget forces you to closely examine your spending habits. You may notice that you are spending money on things you do not need. Do you honestly look at all 500 channels in your cable TV plan? Do you really need 6 pairs of black shoes? Budgeting allows you to rethink your spending habits and re-focus your financial goals.
6. It’s Better Than Counting Sheep
Following a budget will also help you close more. How many nights did you throw away worrying about how you would pay the bills? People who lose sleep over financial issues are allowing their money to control them. Remove this control. When you budget your money wisely, you will never lose sleep over financial issues again.