Why Budget?

By Debbie Dragon
In order to take control of your financial situation and avoidgoing into excessive debt, or in order to get yourself out ofdebt- a budget is necessary. You also must have a budget if youplan to save money for retirement or other large ticketpurchases. If you don’t want to be controlled by your money,you must take control of it and make your money work for you byusing a budget.
Most people have no idea if they are living within theirfinancial means or not, until they find themselves so far indebt that they can’t get out. If you have goals or dreams foryour future, most will require a certain amount of money-without a budget, you are likely to never achieve those goalsand dreams. Also, and probably among one of the most importantreasons to budget is that it allows you to prepare foremergencies and the unexpected. Without a budget, theseunexpected expenses can be detrimental to your finances, andeven change your life.
For most people, “budget” is a “bad word”. If the term makesyou shiver in fear, it’s possible that you have attempted abudget in the past that didn’t work for you. It’s also likelythat you think of a budget as a lock and key over your wallet;but if you begin to understand that budgets are the road tofinancial success, you are likely to have a much easier timereaching your goals with a budget.
How Do You Spend Your Money?
Without a budget, it’s not possible to keep track of all ofyour spending. Many people think they know exactly where theirmoney goes on a regular basis, but without a budget- I guaranteeyou will be surprised if you do a monthly tracking challenge. On a piece of paper, or in a small notebook that you can carryaround with you, write down every cent you spend for a period ofone month.
Write down every single coffee you buy at the local coffeeshop, the candy bar and newspaper you picked up at the market,and absolutely everything you spend your money on for a periodof a month. Add it up. I guarantee you had no idea you werespending that much money on the little “incidentals”.
Three Budgeting Techniques Lead to Financial Success
A large part of budgeting involves personal finance planning. All three of the following activities are important whencreating a budget that you can live comfortably with, as well asone that helps you prepare for the long term.
Controlling Daily Spending: While it’s true that most peoplespend money on things that are not necessary, it’s important toallow yourself some money for this type of spending. Thingsthat give you enjoyment are important, but you need to have acontrol over this type of day-to-day spending so that it doesn’tget out of control.
Creating Financial Safety: An often overlooked aspect of apersonal budget, everyone should prepare for the unexpected. There needs to be access to money for things like a car breakingdown unexpectedly, an illness or accident that puts you out ofwork for awhile, or a natural disaster.
Preparing for Financial Goals: Everyone has some financialgoals. Whether you want to buy a house, send your kids tocollege without going broke, or retire at a young age- these areall activities that require financial preparation and budgeting.
Having a budget is a discipline approach to reaching yourfinancial goals, having money for entertainment and for yourquality of life, and being able to afford the items and expensesyou have to pay.
About the Author: This article has been provided courtesy ofDestroy Debt, http://www.destroydebt.com .
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