So why should you add one more responsibility to your already busy life?
The effort required to create a budget looks kind of like the habit of weekly meal prep. You put in a little work on a Sunday afternoon to get a whole week of pre-portioned lunches and almost-made dinners.
Budgeting takes a bit of work upfront but provides a whole month of rewards.
The Benefits of Budgeting
Let’s chat about some of those rewards. Budgeting might be right for you if:
- You’re looking for peace of mind when it comes to money.
- You’d like to take control of your finances.
- You’re ready to reach your financial goals.
As we mentioned, a budget is a written plan that accounts for every dollar you’ll earn and every dollar you’ll spend. Consider how different that definition looks from your current approach to money.
When you make money decisions before your paycheck arrives, you tell your money where to go instead of wondering where it went. This works regardless of your financial situation:
- If you’re in debt and unable to keep up with all of the mounting bills: A budget enables you to prioritize your payments and take action toward reducing debt. When you know what’s coming in and what’s going out, you can proactively reach out to bill collectors to make payment arrangements for what you owe.
- If you have credit card debt and are living paycheck to paycheck: A budget lets you know exactly how much money is going toward debt and allows you to start a debt snowball. That way you can pay off debt fast, so you can not only start living now but also saving for the future.
- If you’re out of debt but living paycheck to paycheck: A budget encourages you to find extra money—cash you might be throwing away without even realizing it—and put it toward building an emergency fund or saving for large and unexpected expenses.
- If you’re living the good life with an income that’s more than enough: A budget inspires you to make the most of your money. Maybe you’ll pay off your home early, take a dream vacation with the whole extended family to Hawaii, or give generously to people in need.
Budgeting Changes Everything
The monthly budget, practiced year after year, acts as the foundation that supports everything else you want to do.
Yes, everything. Do you know what that means? Total financial freedom!
Manage your money well for a consistent period of time and you might just be able to:
- Ditch your day job for your dream job.
- Live where you really want to live.
- Leave a legacy your parents would be proud of.