How Can a Budget Change Your Habits?
Unless you’re on a budget, changing your money habits can be really hard to do.
Willpower and determination will only get you so far.
The amazing thing about a budget is that it allows you to see how much money you spend, and what you spend it on.
When you know how much you spend on EVERYTHING, it allows you to see what you actually WANT to spend money on and make the necessary changes.
A budget also helps you see where you’re wasting money.
If you don’t make a budget, you won’t make that change.
Reasons to Budget
#1 – A budget helps you gain control of your finances
Think of a budget as a financial roadmap. It will guide you to your destination. You can prioritize your spending, track how you are doing, and realize when you need to stop. You can also put a solid plan into place that is easy to follow and gives you the chance to plan and prepare for the future. Budgeting is the biggest tool you have to change your financial future, and it gives you the power to make changes starting today!
Checking on your budget each week can help you maintain control and prevent you from overspending.
Making decisions at the beginning of the month makes it easier to manage your money.
#2 – Budgeting helps you achieve goals
With a budget, you can move to focus your money on the things that are most important to you. It may be getting out of debt, saving up for a home, or working on starting your own business. Your budget creates a plan and lets you track it to make sure you are reaching your goals. Having a plan also promotes well-being and reduces stress.
Set aside money in your budget each month for your goals.
#3 – Stops Overspending
Spending money without thinking carefully about where it all goes can easily lead you to overspend each and every month.
If you are worried about restricting your spending, consider what it would feel like to have the majority of your paycheck being applied to credit card payments. The stress of finding a way to pay for your everyday needs can be astronomical when most of your paycheck is already spoken for.
Use your budget to help you determine when to stop spending.
An envelope system can make the process easier.
#4 – Budgeting helps you save
People who do not have a budget tend to save less money than people who do. That’s because when you budget, you assign your money to do certain things. As you do those things, you can begin to build wealth and give yourself true financial freedom.
Budget money to transfer into savings each month.
Use your budget to help you stop dipping into your savings or emergency fund by planning for your expenses in advance.
#5 – It Helps Shed Light on Bad Spending Habits
Building a budget forces you to take a close look at your spending habits. You may notice that you’re spending money on things you don’t need. Do you honestly watch all 500 channels on your costly extended satellite plan? Do you really need 30 pairs of black shoes? Budgeting allows you to rethink your spending habits and re-focus your financial goals.
#6 – Enables you to save for expected and unexpected costs
Your budget should include an emergency fund that consists of at least three to six months worth of living expenses. This extra money will ensure that you don’t spiral into the depths of debt after a life crisis. Of course, it will take time to save up three to six months’ worth of living expenses.
Don’t try to dump the majority of your paycheck into your emergency fund right away. Build it into your budget, set realistic goals and start small.
For a budget to work, you must practice it consciously. It does not save you from bad spending habits. It only gives you a goal and reference to help you stay focused.
Let Me Know in the Comments
Do you budget? What has budgeting taught you?
Budgeting can change your life. Grab my Budgeting Worksheet and start saving money this month!
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