Why I think everyone should have a budget
If I asked you what you spent on clothing in February could you tell me? What about groceries? Entertainment? A lot of people have no idea how much they spend on these (and other) categories every month. This is because they don’t have (or don’t properly use) a budget.
Most of the time, the numbers are all different, too. $100 on clothes in February, $350 on groceries, $75 on entertainment. $220 on clothes in January, $290 on food, $160 on entertainment. That’s if they can even remember what they spent in the first place!
I personally think having a budget is extremely important for financial success. By having a budget in place, you set boundaries for yourself. If you only have $300 a month to spend on food, then you only have $300 to spend. You feel bad if you spend more, thus, you try harder next month. After a few months of using a budget, it becomes much easier to stick with.
The first month is very hard. I work hard, I deserve nice things. I’m not going to limit myself! Of course, you deserve nice things – but you should only buy things you can afford. Do you even know how much you make after taxes each month? Do you save anything? You know you are supposed to put away at least 10% of your net income each month, right?
I’m only 25, I have lots of time to start saving, I can wait, and enjoy my life right now.
You should never wait to start saving. The earlier you start, the more you have in the end and the less you have to put away each month.
I believe that those who have created and maintained a budget, are a lot more relaxed and comfortable with their spending than those who do not have a budget. I know many people who do not have a budget and they are always worried if they can make it to the end of the month before the money is all gone.
Why do that to yourself? If you would like to financially stable, then I would strongly suggest starting a budget for your family (or yourself).
Creating a budget is easy. Here are few steps to get you started:
- 1. Figure out how much you make each month, after taxes.
- 2. Figure out how much your fixed monthly expenses cost you (mortgage, cable tv, telephone, car payments). These are the categories you can’t really do much about.
- 3. Figure out how much your variable monthly expenses cost you (groceries, entertainment, transportation). These are the categories you can play with a little bit.
- *Note: If you’re not sure how much you spend every month on things like groceries, entertainment, etc. – just write down what you would be comfortable spending every month.
- 4. Add up your total expenses and subtract them from your income. Do you still have month left over? If so, good for you! Creating a budget will be simple. If you found that you are short money, then you have some work to do. Either lower or cut out some of your expenses, or start making more money.
Do you use a budget? Does it help you?