Do you keep a budget within your household?
Do you track your budget month on month so you know where your money is going?
If you don't this article should help convince you that it would be beneficial to you and your family to make and keep a budget month on month so you can track all your incomings and more importantly your outgoings
Anybody who has any dealings with money - spending, saving or both - would benefit from making and keeping a budget.
Keeping a budget is not always fun, but it is always beneficial.
So whether you are running the household finances, responsible for purchases at work, or trying to manage your way through student life at university, keeping a budget instills organisation and discipline into your financial life h2
Here are 10 good reasons you should make and keep a budget
If you already are then keep up the good work - if you are not then I highly recommend you start today!
1. You'll Know Exactly Where Your Money is Spent
Wouldn't you love to know exactly how your money is spent?
Day to day, week to week, month to month?
Proper budgeting gives you this information, .
Keep a budget and you will suddenly have a good grasp on where your money is going.
2. Gives You the Knowledge to Make Changes
Perhaps you are spending $10 per day on a couple of lattes from your favorite coffee place
This can add up to around $3650 per year.
What could you do with $3650 a year?
Likewise you may be spending too much on your weekly shop, and this knowledge can drive you to make cutbacks to bring you back within budget
If you keep a budget and you are tracking spending then you are armed with the information to make changes to your daily life..
3. Will Help You Reach Your Financial Goals
Keeping a budget will help you get to where you want to be financially in 1 year, 5 years, 10 years.
These are essentially your financial goals
This knowledge combined with a determination to spend wisely and maximise your incomings can assist you in getting to where you need to be in life.
You will also start spending wisely because you will know where your money is going
4. Keep a Budget - Decrease Stress
When you know how much money you make, and know how much you can spend, it takes the guesswork out of things.
Instead of wondering whether you’ll have enough money to pay the bills, if you make and keep a budget and stick to it you will already know.
If you have enough money then great, if you don't then this will drive you to do something about it - which may be bringing more money in or prioritizing
This makes for a better quality of life and will hopefully reduce any sleepless nights spent worrying about money
5. Drives An Attitude of Saving
When you don’t keep track of your finances, they have a habit of disappearing.
The money kept in your wallet will slip away without a trace.
Keeping a budget makes you think twice about spending, and promotes a “think twice” attitude instead of feeling like you have an unlimited supply
This can also drive an attitude of "where can I save money"
6. Allows You to Prepare for Changes
If your financial situation changes, it can bring a sense of upheaval.
However, if you are already budgeting you will be better prepared to make adjustments where necessary.
Simply do a bit of juggling with the numbers and you will know what changes need to be made.
This includes hi-lighting the need for extra money to come in
7. Allows Rapid Decision Making
Thinking you’d love to buy that new laptop?
Or spotted a pair of shoes you would like?
With a budget, you will be aware of how much spending money you have left.
You could also budget a specific amount per month set aside for such "treats"
If you don’t have enough, you’ll know and it will be easier to say “no” to your temptations.
8. Improves Family Harmony
One of the most common causes of family argument is around money.
But if you are keeping a budget then everybody in your family - including your children if you choose to involve them (and you should!) will be able to see what is going in and what is going out
Then each family member can start to take responsibility for their own part of the budget
Most of the responsibility will of course be with the person who pays the bills
But if another family member does the weekly shop (for instance) then they will be responsible for keeping that part of the budget in check
I can't guarantee that if you keep a budget you will stop arguments about money - but what I can say is that you will reduce them, and any arguments you do have will be of the more healthy and positive variety
9. Helps to Manage Your Debt
No one wants to be up to their neck in credit card debt.
If you are, then if you make and keep a budget you will be better able to manage your debt, and be able to see how much you can realistically pay all your debtors.
If you are communicating with your debtors regularly then you will be able to show them your budget and therefore demonstrate what you can realistically afford
If you are not in debt then sticking to a budget keeps you living within your means and avoiding this trap. It is definitely worth the planning to avoid this kind of debt.
10. Gives a Feeling of Organization and Control
Making and keeping a budget could be the first step to just getting personally organised - or getting organised as a household
This organisation promotes a general feeling of order and control which could permeate through your every day life
In turn, if you have a family, this permeates down to your children and demonstrates good financial control which they in turn can adopt through their lives and keep a budget of their own
Keep a Budget - Summary
Creating a budget may seem like a chore, but it brings freedom.
And you can do it in a few hours or over a weekend
Using one has so many benefits that it is worth the effort .
My advice would be to take the plunge today and go and make a budget and then put in steps so that you manage that budget month on month - keeping a budget could be one of the best things you and your family do.
You can get help to make a keep a budget by downloading our free guide...