Now that we are nearly in the new year (how time flies!) and we’re almost through the buy-everything-in-sight-to-give-to-the-kids for Christmas period, it’s time to settle down and think about our finances. What you need is a budget you can live with!
While many people say, “I need to get on a budget!” when it comes down to it, they don’t know where to start or how to do it. Changing the way you spend money can easily be just as difficult (and sometimes harder) than changing your diet.
Consider, though, that the benefits of budgeting can far outweigh the difficulties. And if you know what you’re doing, it’s really not too hard to make a budget and stick to it. Many people make the mistake of giving up before they’ve really gotten started, because they don’t really know what they are doing. Well, that’s what we are here for!
If you follow along with these suggestions, you’ll see it’s not as hard as you think to create a budget that will work for your entire family. Let’s first take a look at the importance of budgeting and why you should spend the effort.
Step One: figure out why you, personally, should make a budget
Common sense might tell you that budgeting is a good idea, but you still may need a few reasons to help you get motivated. And in order to get the best motivation, you need to really buy into the idea that maintaining a budget is a good thing to do and that you and your family will benefit from it. Budgeting is one of those things that isn’t always fun at first, but you’ll enjoy – or at least tolerate – it once you start to reap the rewards.
Budgeting will also allow you to have more financial security. Does it make you feel a little sick whenever you see a stack of unpaid bills greeting you at the mailbox? Do you often wonder how – or whether – you’re going to make it to the next paycheck?
Peace of mind is one of the greatest benefits of budgeting. Instead of wondering where your next dollar is going to come from, you can relax. When you’re living within your means and you put a little money aside each time you get paid, it doesn’t take long to be able to breathe easier, knowing that the bills are paid, you have an emergency fund, and you can see a way to choose some fun extras that you have been wanting to do.
Having money in liquid savings can not only give you peace of mind, but it can truly protect you if you get in a situation when money gets even tighter. For example, if you should happen to get laid off or injured, having money in savings will protect you from losing everything. The more savings you have, the more protection you will enjoy.
Making a budget also helps you to plan ahead of time for expenditures, and that can even help you to save money. For example, if you pay many of your expenses annually instead of monthly, you might be eligible for a discount. And, instead of just spending without thinking, having a budget gives you a reference for making decisions about your finances.
If you’re like many people, you just spend money if you have it instead of thoughtfully considering each purchase. Budgeting is an excellent tool to help you consider and understand that there may be a huge difference between the things you need and things you want.
Unless you have unlimited funds (and that’s probably not the case since you’re reading this), creating and living by a budget makes sense. If you’re in a lot of debt, it really makes sense to stick to a budget and try to get out of it.
Coming soon in Part II: The Danger of Debt
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