Budget, budget, budget. Wherever you go, be it online, in seminars or on TV, you will most probably hear about this concept. Everyone knows what budgeting is; a way to cut your costs and so increase your savings. I was raised as a budgeting girl so it was always sort of obvious to me that I had to do it. You might feel the same.
But why do we budget really?
Budgeting is a way of life which offers multiple advantages over the non-budgeting kind of life. Read on to learn about 6 reasons why you NEED to budget.
Wasting is bad, no matter how much money you earn. By sticking to a budget you can limit yourself to the amount of food and objects you buy. Hence less waste. It may also encourage you to try to reuse items. Limiting yourself through budgets is also a great way to reduce bad spending habits.
Save for retirement
Cutting down costs means that now you’ll be able to increase/start saving money. Saving up money for your future, particularly for retirement, is crucial in our lives. We need to be able to know that when we’re older, we’ll be taken care of. After all, have we worked all our lives to have it otherwise? Budgeting lets you start thinking about a retirement plan now before time passes by.
We all have debts sometime in our lives. It may be credit card debt, a loan or even a mortgage. By cutting down costs with budgeting, you will have more spare money, allowing you to cut debts faster and reducing your interests. Debt doesn’t have to be for life. You can learn ways how to get out of debt.
Some people save money, to spend money. Budgeting can hep you save enough money to buy that big house or take the long vacation you’ve always wanted. Or both. After all, there is nothing wrong with spending your savings the way you want to.
Build an emergency fund
Life is unpredictable. One day you’re at work, then the next you’re in the hospital. Dark, I know. But it can happen. So it’s best to always be prepared. Emergency funds are used for so much more than medical emergencies. They can also be used as back up income etc. Emergency fund are a necessity rather than a luxury.
Follow your dreams
Budgeting is not just about saving money. As I said before, budgeting is a way of life. It can help you achieve a happier life. Money should never stop you from following your dreams. If your dream life offers lower income, budgeting is a way to deal with that. Whether you save up before or live with a reduced income, budgeting is the way.
Budgeting is hard. It is so much easier to just live with no constrains, but unless you’re a billionaire, you need some kind of budgeting method. If you find yourself in a tough spot while budgeting, one thing that may help is keeping a vision board of your goals. This way you are constantly reminded of what you are working towards.
Is budgeting your way of life? What do you budget for? Share with us in the comments!