It’s shocking to me the number of yopros that don’t have a budget. ‘Its too hard to setup or maintain’, or ‘I don’t make enough money to need one’. False! Unless you’re as rich as Bill Gates, you won’t be successful without a budget. A budget is the roadmap to financial freedom. If you don’t know where you are going with your finances, how will you ever get there? You don’t have to be nerdy or a financial blogger, or even smart to have a budget. For those of you without one, here’s 5 reasons it’ll change your life.

1) Self fulfilling prophesy.

A lot of people don’t have budgets because they are afraid. They’re fearful that having a budget will suddenly remove all the fun in their be lives. This couldn’t be farther from the truth. All a budget really is a journal. Is a journal of all your expenses. If you don’t have a budget, try this next month; record every one of your expenses. It doesn’t have to be time consuming or fancy, just every couple of days, login to your banking or credit card statement and jot down what you’ve spent. Don’t fret about writing down the $0.99 you spent at the gas station buying a Coke. Just focus on the bigger items, and get as many as you can. At the end of the month, sit down and tally up what you spent. At that point, the numbers will speak for themselves and you’ll quickly realize what you need to change.

2) Peace of mind.

I had a conversation with a reader the other day. He wasn’t in these of financial situations and I asked him well where was all his money going? He couldn’t give me a good answer. Although they say ignorance is bliss, talk about the stress that comes with not knowing where your money goes. A budget will not only help shape your spending habits, but also give you peace of mind. It won’t feel like your money is coming in and going right back out. You won’t come to the end of the month and wonder if you can afford to go out one Friday night or if you can afford to  buy the new fashion accessory…because you’ll know whether you can or not. Your budget will let you know how you’re doing for the month. Your budget will also help you plan your savings and give you the peace of mind with a rainy day fund.

3) Roadmap.

If you don’t know where you’re going, you’ll certainly never get there! Where do you expect yourself to be financially in 5 years? Hopefully in a better place than where you are now! A budget lets and helps you set goals for yourself. “I’d like to save $500 per month” or “I’d like to increase my contribution to my retirement plan”. What about “I’d like to end the month in the black and not go negative!” A budget is the tool that will help get your from A to B, with B being financial freedom!

Having a budget is so much more than just ‘keeping track of your money’ or something that says ‘no’ every time you want to buy something fun. A budget will help you sleep better at night, provide you with a roadmap to financial success and will most likely actually help you achieve financial success. Seeing that $200/month cable bill (heard that from a reader!)  or how much you spent on eating out each week stacked up against your income will probably help you rethink your spending.

Setting up a budget isn’t hard, a simple spreadsheet will work or go online to Mint.com and let technology do it for you. It doesn’t take that much time to maintain either. You’ll be surprised with your results!

What kind of a budget (if any) do you use? If you don’t have one, what’s holding you back?

Check out these other budgeting resources:

Mint.com – Super easy to set up and maintain, and it is all online

Budgeting: Setting Up A Budget and Making It Work A great Kindle book and it’s only $0.99!

Official YMF model budget (free download)

Fixed vs Variable Expenses Budgeting