It seems like a lot of people like to think of budgeting as this dirty topic and something that is just going to take all of the fun out of their lives. I’ve had people email me telling me that I shouldn’t recommend budgeting because it’s just not feasible for some people.
Every single person out there can benefit from having a budget that they actually stick to. This isn’t a topic just for people who are making under $50,000 a year and may need to pinch pennies once in a while.
This topic is for everybody, even those who are making over $100,000 per year and seem to have it all together. Budgeting isn’t something that is just for frugal people and people who are trying to pay off debt.
Everybody out there knows what a budget is, but people don’t really talk about the ways that budgeting can be helpful to you and how it can affect your life. So, let’s dig into some of the reasons why you need a budget!
Table of Contents
What is a Budget?
A budget is a plan that is created for your money that helps you plan for the things you need, and the things that you want. A budget lists your total income and your total monthly expenses and it creates a plan of where you’re going to allocate that money before it all disappears into the depths of cash registers and your couch cushions.
5 Reasons Why You Need a Budget
1. Budgeting Forces You To Have a Real Conversation About Money
When you sit down and start creating your first budget you have to really take an honest look at what you can afford and what you probably shouldn’t be spending your money on.
A ton of people (including me) live about their means from time to time and a lack of a budget is a huge contributing factor to people being out of money before the end of the month.
It’s really important to start figuring out where you can cut things from your budget to stop living above your means because it’s only going to hurt you hater on, and you’ll never be able to have the life you truly want.
During your budget creation you’ll be able to think of all the ways you truly want to improve your life and you can create ways that will help you get to your goals!
#2 – Budgeting (surprisingly) Makes You a Happier Person
Money is one of the biggest stressors in so many people’s lives and giving your money a plan can take sooooo much stress off of you and especially off of your relationship. So many couples end up fighting about money at least a few times a year depending on their situation, and most of the time this can be minimized by just having a budget and being able to openly talk about money stuff with your partner.
Sticking to a budget reduces stress for a single person as well, everybody worries about money on the daily, so it doesn’t matter who you are. Not having a budget will severely impact your happiness! When you have a budget you know exactly how much money you have to spend, and you’ll never walk up to that cash register wondering if your card is going to get declined again…
#3 – Budgeting Helps You Prepare for the Future
The best part about a budget is that you can take the time to imagine your ideal day in 5 years and work backwards from that. What does your ideal day look like? What kinds of things have you accomplished? You can work all of these ideal situations into your budget.
How do you plan for the future? Well, there are these awesome things called Sinking Funds that allow you to save up for things by putting a small amount of money away each month towards a specific goal. Let’s say in 5 years you see yourself with a gorgeous downtown apartment and a puppy. You would create a dog sinking fund and a first & last month’s rent sinking fund. These two things will help you work towards your goal without it making a big dent in your daily life because you’ve budgeted monthly for these things.
Another awesome thing that budgeting helps you with is being prepared for unwelcome emergencies. You can budget a certain amount of money each month to go into a specific account that’s just meant to cover these expenses that you can’t be prepared for, this account is called your Emergency Fund.
#4 – Budgeting Stops Impulse Purchases
Budgeting makes you a ton more aware of your purchases which means you won’t be buying an extra box of cookies or buying an extra bathing suit that you don’t really need. If you’re a chronic overspender, you should check out this blog post that will help you break those habits!
Having a budget (especially if it’s a cash budget) ends up making you think harder about these unnecessary impulse buys. Think of it this way, if you know you’re digging into your grocery budget when you buy that extra bathing suit, you aren’t going to have enough money to eat for the rest of the month. This will teach you a real lesson in self-control when you’re starving and eating saltine crackers for dinner.
#5 – Budgeting Actually Makes You Healthier
The thing is, when you start budgeting the very first thing that gets cut is junk food & other unhealthy habits. For example, if you’re a smoker you may try and cut back on your habit. If you’re a snacker you’ll try and cut back on the candy and chips.
Budgeting will make you drink more water, because water is cheaper than soda or redbull. You’ll also cook at home much more often because eating out is way too expensive!
Just think of all the crazy parts of your life that budgeting will help when it comes to your health!
So, Which Budgeting Method Should You Try?
Personally, I’ve tried every budget in the books and failed a million times. It’s honestly like a diet and exercise regimen, you just have to try everything until one sticks.
The budgeting method that has worked best for me is the Zero-Based Budget because it’s so straight forward and doesn’t leave much room for interpretation. Zero-Based gives you a plan for every single penny which makes messing up a lot more difficult.
Final Thoughts
Budgeting is one of the absolute best ways you can improve your finances and I highly suggest you start working towards a budgeting system that works for YOU, don’t just try and use one for a long time because someone else says it works. You budget doesn’t have to be perfect, but I promise it’ll be worth it.
Budgeting is definitely a necessity in life! I agree that it help you prepare for the future, even if it’s short-term, such as knowing what bills to pay with which paychecks. Knowing everything is paid and taken care of is defintely a stree reducer.
so true! that’s why I wish people would stop saying they don’t need a budget! it helps in so many ways
Budgeting is SO important!! It’s so easy to just haphazardly spend spend spend without having one.
right? budgets are so necessary!
Budgeting is totally one of those things that you need to do but you don’t necessarily want to do. You are so right that you will feel better in the long run though!
Ain’t that the truth!
We totally agree with you. Budgets are so important, for everyone at every age and every income bracket.
Thank you!
When I was just starting with work for the very first time in my life, I wasn’t wise with money. It was then that I realized that I needed a budget if I were going to save up for my future. I just think this is really essential even if you don’t have kids or anything yet but yourself.
I think it’s MOST important for single people without kids! They’re most likely to spend on silly things haha
It is really true that budget gives as happiness, you will not see it but in the end you will feel it.
So true!
I totally agree with you, Having a budget is a real thing, real conversation with oneself. Controling yourself is the best way to stick with your budget. I’ve been experimenting on how to budget monthyly groceries. Tried it to do it once vs twice or more, well it’s all actually the same if we have the budget for the month.
Good job on working on a grocery budget! I find that is the hardest part of my monthly budget
Awesome reasons! I have enough for all my bills, food etc I don’t though have any savings. No life insurance or money put away. I am relieved that nothing is past due or has a shut off however that won’t help me if my furnace brakes down, car needs repaired etc
You’re doing better than a lot of people out there, unfortunately! Just keep working hard and trying to save where you can!
This is more important than ever, now that I am a mother! Wish I had taken this advice when I was in my 20’s.
Better late than never!
This is a really great post. It sure will help anyone who is thinking of starting a budget and I love how you explained that it can make you healthier too!
Thank you!!
This is a great post! It’s so true that a budget makes us happier and healthier. It may seem like a budget is a buzzkill but it actually can keep our lives more organized and can give us a little bit of peace of mind.
Budgeting IS a buzzkill, but a necessary buzzkill!
Yes! Nowadays trend is budgeting, and it is a trend for good reasons!
Yeeeess!
I agree, budgeting is extremely helpful and keeps me financially intact, haha. It stops me from making impulse buys and I end up saving more money in the long run.
Haha! Impulse buys are so fun sometimes though…….
Such an interesting and informative article. Those are such a great help for us on how to budget our own money. Thank you for sharing this with us.
thanks for reading!!!
Great article, healthy does not always mean expensive
Exactly! I wish more people understood that!
I love budgeting. It seriously helps you save and financial stability
so true! thanks for reading
budgeting totally makes you healthier! Fresh veggies are WAY cheaper than junk food (most of the time)
It also forces you to eat at home rather than order take-away!
People always say eating healthy is super expensive but it just isn’t true!!
A good article with really valuable information and people. Everyone needs a budget, it gives stability and self-confidence.
thanks for stopping by!