You may be wondering why you should learn how to budget. There are many things you can gain by creating a personal budget, and there are many disadvantages to not budgeting. Some of the main points are covered here:
Reduce Marital Conflict
Many conflicts in relationships and marriage stem from issues involving money. This conflict can be reduced, and even eliminated, with a good family budget. In helping a relationship, a budget can:
- Give more insight into where the money goes
- Clearly define who is responsible for what expenses
- Provide a way to separate financial responsibility and reduce surprises when looking at your account balance
- Define ahead of time how much money is available for everyday expenses as well as occasional large expenses
- Help both partners to talk openly about money.
A useful way to manage money and reduce conflict in a relationship is to have separate bank accounts and agree on who is responsible for what expenses. This will reduce or even eliminate surprises when checking your account balance and finding that your partner has unexpectedly withdrawn money.
Get Out Of Debt
When you have a budget, you can ensure that you pay down your debts on a regular basis. You can even calculate when you will get out of debt. When you do this, the money you were putting towards your debt can go into a savings account. The money you used to lose spending on interest payments will be like extra income!
Living Within Your Means
Without a personal budget, it is difficult to make sure your income covers your expenses. If you find you are always trying to get out of debt, or have difficulties paying off your credit card each month, then you need a budget. Having a budget will allow you to understand how much money you have to spend in each area of your life. This will ensure that you do not spend more than your income which makes it even harder to get out of debt.
When you understand how much money you need for living, then you are in a position start saving money for a future goal, such as:
- Emergency fund
- Home theater
- And more …
With a good personal budget, you can save for any of these things and more. In fact, you can save for multiple goals at a time.
Anxiety about anything is caused by being confronted with something that you feel you cannot control. The way to deal with anxiety is to develop the necessary skills to manage or control what is making you anxious. In the case of money, this means developing more insight into how you spend your money, how much money you need, and how much money you have. Trying to deal with your anxiety by getting more money does not solve the underlying problem. When you have control over your money, you will be more confident that you can get by with what you have. In time, you will be able to make sure your expenses are always covered, create an emergency fund (which also helps reduce anxiety), and save for the things that you really want.
Spend Your Money More Wisely
Having a personal budget lets you focus on where you spend your money. A budget will help you make sure that your important expenses are covered. This will allow you to spend any extra money with a clean conscience.
Make Your Money Last Longer
Having a personal budget will give you insight into how much money you need at each time of the month. This will give you insight into how much of the money in your account is needed for future expenses, and how much can be used now.
Related PagesWhy Budget
What Is Needed To Make A Budget
How To Budget
Personal Budget Example
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Budget Allocation Tool