Who Needs a Budget? Everyone! Learn Why You Need One!

A budget is a tool you use to keep track of your income and your expenses and give you better control over your finances.

 Now, some may say that a budget is useless if you’re broke. But the thing is, they are beneficial no matter how much money you have.

Those of us with money need to budget as well as those of us without.

 In both situations, the purpose is the same. To keep track of our money and paint the whole picture of what is going on with our finances.

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Why People With a Little Money Need a Budget

1. To keep track of which bills needs to be paid and when:

Many of us allow companies to take money out of our bank accounts automatically.

 This can be convenient, but it creates a disconnect between you and your money.

And if you may end up feeling like your finances are out of your control when companies withdraw your money according to their schedule.

2. To know what is affordable now and what has to wait:

Creating a budget gives you the opportunity to sit down and deliberately set your financial priorities.

 You decide what’s important now and what will wait until later. This will not only help you control your spending but it will give you a plan for accomplishing your goals.

3. To keep track of restricted cash:

 A huge benefit of having a budget is that it makes you aware of what you have available to spend.

Many of us open our bank accounts and we assume that whatever is in the account is available to spend. But this is a mistake.

 Budgeting for your goals will help keep you aware of just how much you have available to spend and how much of your cash is restricted for future purposes.

4. To make sure each dollar has the right job:

 It’s very easy for money to disappear if you don’t give each dollar a specific task and make it stick to it!

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Why People With a Lot of Money Need a Budget

1. To know and control where their money is coming from and where it’s going. Of course, they most likely wouldn’t have a lot of money without being able to do this.

2. To keep track of their money goals, and make sure the steps they are taking are in the right direction.

3. To maintain their wealth.

 Everyone wants to have a high quality of life and buy the things they want. And people with money can actually do it.

 However, if they don’t budget their money and determine how much they’re willing to spend in advance their money can disappear just as easily as other people’s money.

Budgeting is Resource Management

What do I mean? Well, think about this. A squirrel budgets. Every summer he decides how many of his acorns he can eat and how many he has to tuck away for winter.

That’s budgeting. It’s not specific only to money.

It’s human nature to want to use all the resources we have at the moment, but we have to be careful in deciding where to put our resources and when.

All of us, whether we are rich or poor, budget our time, our energy, our attention. We decide in every moment what we need to pay attention to and spend time on now and what can wait.

The same has to be true for our money.

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Advantages of Having a Budget

Here some of the advantages of having a budget:

1. Having a budget decreases our chances of being unable to deal with unexpected situations.

2. It helps you to make sure your money is serving to your purposes and is bringing as much value to your life as possible.

You’ll allocate resources effectively to the things that are important like getting out of debt, creating a retirement plan, etc.

3. To keep track of, maintain, and grow your net worth.

4. To prevent unbudgeted lifestyle increases from destroying your wealth.

5. To increase your level of wellbeing, happiness and reduce stressful situations like not to have enough to respond to your obligations.

6. To plan your financial future and be financially independent.

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The Facts About How Many people Have a Budget

The facts about how many people have a budget

Even though the advantages of having a budget are numerous. Many people still don’t do it.

As this research study reflects only One in Three Americans Prepared a Detailed Budget.

 Many people that don’t budget avoid it because they don’t believe the benefits are worth the effort.

 Or they have a negative perception of the budgeting process. Here some of the most common reasons.

Common Reasons Why People Avoid Budgeting

1. It is time-consuming and tedious: Budgeting requires time figuring out your income and expenses, prioritizing spending and inputting data.

 Many people have busy lives and just don’t have the time to invest.

2. Budgeting is restrictive: The idea of living under a restrictive plan can be a downer for many of us because we feel that we won’t be able to buy the things we like.

3. Budgeting is intimidating: This is the idea that you won’t be able to stick to the plan you’ve created and will make mistakes in the process.

4. Feeling discouraged: Facing the reality of our financial situation can be demotivating. To prevent this, we avoid the details that budgeting would expose.

5. We may think that we don’t need it: The idea that budgeting is more related to people that have money.

6. Budgets are inflexible: Sometimes people become obsessed with sticking to their budget, and if they diverge they feel like they’ve failed. But you must consider that things change and your budget must be flexible as well.

No More Excuses 

 No matter how difficult you think it is to create a budget, in the beginning, it’s necessary to create a plan for your money that takes you down the path to financial independence.

 Budgeting doesn’t have to be difficult. There are plenty of resources created to help you to make things easy.

No matter if you do it on paper, excel or an app. You can use whatever works for you as long as you take control of your financial life.

Wrap Up

There are several reasons that each of us needs to have a budget. Many of us have avoided it for one reason or another but whether you have little money or a lot, there are tremendous benefits to budgeting.

 Are you budgeting already? If so, what resources have helped you? Let us know in the comments below!

Cheers,

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