Do we really need to budget our finance? Do we really need to plan our spending? Why do we need to do it? Why the planning and budgeting? Why can’t we enjoy frivolously, buying what we want and need? Why can’t we enjoy now and forget then? Why can’t we be entitled to the live style we want?
If you forget then and enjoy now and unforeseen events occur how do you manage it? Can some expenses be managed? Can the world economy be depended and relied on in years to come? Do you know that money not well managed will be accounted for in tough times or years to come? Is this not the right time to correct the financial errors you made years back to become financially free?
I once chatted with a friend who got married five years ago. He wished all the money he wasted enjoying frivolous lifestyle when he was single could be gotten back. He wished he planned and budgeted for his money. But now, he documents and keeps account of every penny used and where it went. Now, not a penny of his fall to the ground because responsibility surfaced. He accounts and document for every penny used. Once his salary comes in, the first thing he does is to budget his money. He never spends above his salary, saves and controls his spending.
What is budget? Why do we really need to budget?
BUDGET is planning your finance for future savings, spending, investing and listing out future income and expenses.
It is the money set aside to manage your planned expenses and project for the future.
The budget might be to have excess money for use in future time or to manage your expenses not be greater than your income. It helps to avoid being a failure in what you aim to achieve. It makes your plan goal- oriented, specific, smart and achievable. Budgeting is another financial map to guide you to your desired financial destination of being financially free.
KINDS OF BUDGETING
Corporate body budget for their business to have a great year and manage expenses, salary payment, liabilities and others.
Government budget to plan for revenues and expenditures and projects to handle for the year.
Personal budget is a financial plan used to manage income towards expenses, savings, investing, debt and others. This is how we really plan our spending to become financially free. It helps to have enough money to do things you need to do or start that side project you need to invest in.
9 REASONS YOU NEED TO BUDGET YOUR MONEY
TO CONTROL RESOURCES AND STOP FRIVOLOUS SPENDING
With budgeting, it limits your overspending and help you not to drown in debt. It helps to always delay gratification for the achievement of financial goals. It helps close those chapter of excessive spending which has developed into a bad habit. Its helps to rethink and helps focus on road to financial freedom.
Knowing where your excesses going, you can easily cut it down like eating outside or excessively, transport, bills and materials things. With this, it helps you cut it down or either manage it to help achieve financial freedom.
TO HAVE ENOUGH MONEY TO START SIDE PROJECT
With budgeting, it helps you plan for that side project, helping you know how much to set aside for the project, the financial implication and how to achieve the goal.
IT HELPS TO WORRY LESS ABOUT FINANCIAL ISSUES
It overcome any financial issues ahead and worry less about it and help to make adjustment to your finance before the problem expands or surfaces. with spending limits, it opens opportunities to see more money and know where to categorize it.
IT BECOMES A YARDSTICK FOR MANAGING YOUR FINANCE
You become a better money manager and accounts well for any amount spent, you become accountable and held responsible if your money is well managed or not. It gives a pattern organized pattern for spending your money.
IT HELPS CREATE WEALTH
With budgeting, you will be able to create plans to settle and pay off your debts and live a debt free life and plan your finance well. It now gives you the chance to grow your savings, plan for investing a portion of your money to make your money work for you and know how to spend, control spending and have a future financial forecast to become financially free.
IT HELPS PLAN FOR RETIREMENT
With budgeting, you will plan for retirement which is vital for wealth creating. You can create the retirement account if you don’t have, budget a portion of your income into the account monthly or the bank automate it for
future reasons, this budgeting for retirement needs great attention.
TO COMMUNICATE PLANS FOR THE FINANCE
When your income comes in, you break it down to know how to budget and what you are budgeting for and why are you budgeting for it. Planning for your finance also show there’s a change of habit and want to know what’s wrong with your finance and where you are spending excessive and make the right financial decision.
Communicating plans for your finance with your family help project for family needs, educational plan for the family, vacation, buy the car and achieve a desired family goal.
TO ACHIEVE FINANCIAL SET GOALS FOR THE YEAR.
Once you become financially aware of your situation and its structured by knowing what goes in and out, you will easily achieve your financial goals for the year you will easily create budget for all expenses from daily, weekly, monthly and yearly. Also, create budget for fun and entertainment and have a great year.
With budgeting, you plan for unforeseen events or expenses that can occur in any time of the year and manage them well without affecting your finance or even destabilizing you in any way.
With these valid points above, we now know why we budget and how invaluable it is to become financially free. With budgeting, your finance has a map guiding it to its desired location.