One of the most important tools to ensure your financial success is having a budget. It’s one of those financial lessons you wish they taught in school because of its importance and its impact in your day to day living. If you want financial security, a budget is your roadmap and guardrails to help you achieve it. You have to be able to get your salary on payday and know where all your cash is going – this way, you won’t miss important payments and you will be able to control what you spend on your social life. 

Still haven’t convinced you? Well, let’s take a look at some of the top reasons you need to have a budget every month. 

You Stay Focused

A budget will keep you working toward your goals. If you have a goal of paying off debt, your budget will dictate what you can spend on that above your minimum monthly payments. Whether you have a savings goal for a vacation or you want to buy a new car, a budget will make sure that you remain motivated and on track. With a budget, you are forced to map out all of your goals and you can see whether your goals are even feasible in the first place. It’s an excellent tool for success.

It Prevents Waste

It’s a big problem today, but consumers spend far too much money that they don’t have, for things that they don’t need. It’s a problem because it often comes from “magic money” in the form of credit cards. Credit card debt is far too high, and it stops people from living within their means. A budget that you create can help you to avoid too much credit and spend only what you have to spend. Sure, it means that you have less than others, but if you can’t afford it yourself, you shouldn’t be buying it in the first place! It’s so much easier to jet off to that adventure you’ve been dreaming about when you know you don’t have to pay it off later! One word sums up the best way to present waste; “NO”.

You Feel Better – Literally

When you have a budget, you can put money aside for a level funded health plan that will keep you feeling great. Having health insurance is an important piece of leading a healthy life with a safety net under you. You’re able to manage your health better knowing that you have health insurance on your side to keep you feeling good on the inside. Health is something that you must budget for, and this way you can ensure that you are putting your health first!

You’ll Retire Happy

When you budget and save, you have a more secure retirement plan ready to help you to live your best future life. By setting aside money for retirement each paycheck/month, you’ll be able to take advantage of tax benefits (401k or IRA) and watch it grow over time! Spending money today is important, but saving it for the future can change the way you live later on!

Emergency Preparation

A budget gives you room to create an emergency fund for those moments that you cannot foresee coming. You cannot prepare yourself for all emergencies, but you can have money to one side to ensure that you are covered in the event of one. An emergency fund is important and you will be able to save up to six months of expenses to back you up when something goes wrong. You can’t dump all your cash into your fund right away – this has to be built slowly so that you can stay within your monthly budget. 

You’ll See Where You’re Going Wrong

Sometimes, you think you’re doing everything right with your budget but it takes writing it all down to see where you’re going wrong. You may pay for cable TV and only watch Netflix – do you need to pay for cable? How about that gym membership you haven’t used in months. Do you need that gym membership? Of course not! Budgeting can help you to unearth some unhealthy spending that you didn’t know you were even doing. So, get your budget created and start making lists of things that you are spending and saving for!

You’ll Sleep Better

If you know your money is safe and well managed then you will sleep much better. You may be constantly worried about big payments coming out that are beyond your control. You may also be worried what will happen to your possessions should you unexpectedly pass away. Well, the good news is that there are insurances that can help you with these sorts of worries. If you have a mortgage then you will be pleased to know that you can sign up to mortgage life insurance. This means that if you die before your mortgage is paid off then the debt doesn’t pass down to your next of kin.

When you know your money and your debt is under control, you are going to sleep better at night. It’s easier to feel relaxed when you know that everything you have to pay for is squared away. You do not have to let your finances control your life. In fact, a budget will enable you to take back that control and you will never lose a night of sleep again.

You have to remember that your budget is going to be only as good as YOU make it. If you refuse to acknowledge your own bad spending, you’re going to mess your budget up from day one.

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