Why You Should Keep A Budget

If you have ever read any sort of book on managing your finances, then you know that one of the pieces of advice that every single one of them will give you, is the importance of making a budget and sticking too it. Everywhere you look, in every book or magazine that discusses managing your household funds, they are discussing how to create a budget, but no one seems to talk about why it is so important.

Budgets are basically just a way to track your income and your spending. They allow you to assign certain amounts each month to different expenses. They are living, ever-changing plans. Some months you may need to allot more money to some things and less to others. The most important part of a budget, of course, is sticking too it. And, that is the part where the whole thing breaks down. Sticking to the budget and saying “no” to certain expenses is the hardest part. The whole goal of making a budget is to manage your expenses, curtail your spending and make saving money for getting out of debt or reaching goals easier.

Here are some reason why budgeting should be a part of your life:

• Budgets can be your best friend – All too often, budgets are given the same bad rap as diets. Because they are restricting an activity that is enjoyable, they can seem like a huge buzz-kill. The truth is, reaching your financial goals and being able to make large purchases that improve the quality or enjoyment of your life is a lot of fun, and budgets are just a tool to accomplish that.
  
  
• Budgets are a road map for where you want to go – You know what your goals are and where you want to be. Putting it down on paper is a way to decide how long you plan to take to get there and the way that works the best for you. It isn't a strict plan, and if you end up spending too much this month, you can change things around and get back on track easily.
  
  
• If you don't have a budget, it is hard to know where you stand – I recently got back into the habit of tracking all of my purchases with an online budgeting tool. I made a commitment to go through my online banking transaction history each week for two months, promising myself that I would categorize every purchase into budget categories. The software I used allowed me to make a pie chart explaining where my money went each month. Let me tell you, it was certainly eye-opening. I realized where I spend more money than is necessary, and where I was not spending enough. By creating a budget for every expense, I was able to see that I could afford to buy some things I wanted just by not purchasing several smaller ticket items.
  
  
• Budgeting allows you to set saving goals and stick to them – Having things written down and being able to track your progress is a tried and true way to accomplish just about any goal you have. It can make reaching the goal fun and keep you motivated. Savings goals are no different. Keeping up with a budget lets you make the goal and see how far along you are getting. If you make a promise to yourself to stay involved with it, you will quickly see how rewarding it can be to track your progress.

Keeping a budget and sticking to it is the best way to really understand your own finances. Whether you have a lot of debt, or virtually none, it pays to track your spending. I used to think that budgeting was for rich people or people who were very organized, not for free-spirited, mostly broke, people like myself. After having kept up with my finances for a few months, I can tell you that budgeting can be super easy and a lot of fun. It has made me a more informed shopper and given me a way to cut out some money wasting habits in order to be able to purchase things I really wanted but didn't think I could afford.

Stay tuned next time, when I will list the things that it you should splurge on.

Have you tried making and keeping a budget? Let me know in the comments.

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By Melissa Kennedy- Melissa is a 9 year blog veteran and a freelance writer, along with helping others find the job of their dreams, she enjoys computer geekery, raising a teenager, supporting her local library, writing about herself in the third person and working on her next novel.