If you’ve been resistant to using a budget, it might be time to give in. Once you read this post covering seven reasons you have to start using a budget you’re going to see why it’s time to change.
When I don’t use a budget my financial life is a mess. But when I use a budget, everything works better. And I have less stress.
Keep reading to learn the seven top reasons why you should use a budget. And learn how using a budget helps you in many different areas of your life.
1 – Peace of Mind
While a budget can be stressful, it can also give you peace of mind. A budget can be stressful when money is tight. But when you get everything down on paper you can see where the money comes from and where it goes.
If you’re always stressed out about your financial situation, start using a budget. It might help you sleep better at night.
2 – Accurate Picture of Your Financial Health
An accurate budget gives you an accurate picture of your financial health. And it not only helps you understand your current financial situation, but it also helps you understand your long-term financial health.
Some people try to ignore things when things are tough. But when you ignore things they tend to get worse.
Use a budget to build a picture of your financial health and see where you can improve.
3 – Spot Problems Before They Happen
Sometimes everything seems to be going well and you get slammed with something you didn’t see coming. But a good budget system can help you spot problems before they happen.
While I use a monthly budget, I also use a yearly budget. And I build my monthly budget out for every month of the next year. This way I can add a new item in a future month and not worry about forgetting it.
4 – Plan Your Financial Future
Do you have a solid plan for your financial future, or do you just hope it all works out? While it might work out if you’re lucky, if you don’t have a plan, you’re gambling.
You can use a budget to help build your financial future. I recommend budgeting 10% of your income toward building a better financial future. You can even create a bill due every month on your budget for investment.
5 – Never Forget
When I build my monthly budget, I list every bill due for the month, the amount, and when it needs to be paid. This helps me to never forget about a bill.
I’m busy and I’m sure you are too. And when you get busy, you might forget something important like a bill or payment.
But when you incorporate everything you have due in your budget, you never have to worry about forgetting something important again.
6 – Late Fees Add Up
When you pay your bills late, you often have to pay a late fee. And these late fees quickly add up to a lot of extra money.
With a budget you know when every bill needs to be paid. And you schedule your payments so they’re never late.
But if you don’t use a budget you might forget when bills are due. Or you don’t plan ahead so you don’t have enough money to pay bills on time.
7 – Overdraft Fees Kill Your Finances
I made a mistake recently. I sent an electronic payment for $1 more than I had in my account. And the bank charged me $32 for the overdraft.
Mistakes like this cost a lot of money. And if you make a habit of overdrawing your accounts, these fees can add up to a lot of money.
When you use a strict budget you can avoid making mistakes like I made. And I’m sure you have a better use for the fees than your bank has.
Conclusion
If you don’t have a clear picture of your finances, you can get in trouble fast. But using a simple budget gives you peace of mind and a clear picture of your current and future finances.
A budget helps you plan ahead and identify issues before they happen. And with enough time you can eliminate most problems.
Once you start using a budget you’re going to wonder why you haven’t been using a budget. And if you have kids, teaching them how to create and use a budget benefits them for the rest of their life.