01Regain Control of Your Money
A budget is a useful tool to help you decide when and how to spend your money. Don't think of it as a means of restriction. Think of a budget as a plan for telling your money where to go.
When you budget, you get to choose your financial priorities, whether it is putting money into savings, buying the new game that you want or expanding your wardrobe. Plus, if you use and stick to a budget, you'll never find yourself making tough decisions at the end of the month.
As you assign money to each category, you're giving yourself the power to determine how much to spend where, after you meet all your monthly financial obligations, of course. A budget can help bring into focus what is most important to you.
Alternatively, it can help identify areas where can cut in order to meet your financial goals. For instance, some people may choose to brown bag lunch every day to afford to buy a new pair of shoes or a new game each week. Other people would rather skip those items to eat out every day.
02Stop Worrying About Money
While a budget will not magically solve all your financial worries, it can do a lot to relieve your financial stress. When you make a plan at the beginning of each month and you allocate each dollar to a specific purpose, it can take away that panicky feeling that often creeps up at the end of the month when you may come up short or be counting down the days until your next payday. In fact, one of the best thing about sticking to a budget is it can help you stop running out of money each month.
Remember, creating a budget that helps you work on your financial goals and to change your financial picture is the first step. Following a budget each day is the next step. Once you master budgeting, you will be able to reach your goals much more quickly.
Another tip: Be sure to look for ways to save on your daily expenses to help your budget really work for you.
03Stop Going Into Debt
If you are tired of relying on your credit cards at the end of the month or if you are worried about the balance is slowly creeping up, then a budget is your solution.
A budget can help you spend less money than you make, a cornerstone of good financial health. There are several different types of budgets you can choose to stop going into debt. You can set up a weekly budget, with certain amounts allocated to spending money that week. Remember, once the money is gone, it's gone. No dipping into your savings or swiping your credit card to make up the difference.
Or, you can switch to cash for your budget. This can really help you get a handle on your spending since it's common to spend less when paying in cash as opposed to using a debit or credit card.
04Stop the Money Fights
A budget can really help to cut back on the fights you have with your spouse or significant other about money. But it won't be easy. In order to really cut down on financial fighting, both you and your partner will need to play equal roles in creating a budget. You'll also need to share responsibility for sticking to that budget.
It's important to have both partners participating in the discussion and to have time to review your spending and saving goals. A monthly family meeting to discuss finances is a great habit to start.
Once you get the hang of budgeting together – and once you begin making headway on your financial goals – your money fights will become more infrequent.
05Make Your Money Work for You
Putting it simply, a budget will give you control over your money. This doesn't necessarily mean that you need to earn more money to reach your goals. You just need to control what is coming in.
That's where your budget comes in. It's a tool that will help you work toward your goals while making good financial choices in the day-to-day. Plus, a budget can help you stop dipping into savings each month and make real progress toward your goals.
Updated by Rachel Morgan Cautero.
5 Reasons You Should Start Budgeting Today
Nobody ever really wants to create and stick to a budget. It's hard work, and often brings to mind feelings of restrictions, limitations, and plain old not getting what you want when you want it.
There are a million excuses why people choose not to budget, from being too busy to somehow hoping things will work out. You may even feel like you are too poor to budget, or that you make enough money that you don't need to stick to a spending plan.
The truth is that your budget is a great tool, like a fitness tracker, that can help build a solid financial future, no matter how much money you make. Here are five reasons you should start budgeting today.