5 Reasons You Need a Budget
Written by: Liam Watts
Theoretical physicist, paragon of science, and Nobel Prize winner Albert Einstein once said, “The hardest thing to understand in the world is the income tax.” Money is perhaps the simplest thing to lose and the hardest to gain. But why is this? Sadly, many people are unable to wrangle in their own money and find themselves instead subjected to it. Debt and credit will quickly weigh down even the strongest person. Of course, managing money is not only vital to living life, but it’s also a biblical principal. If you can’t take care of yourself and your own basic needs, you will not be able to live out God’s greatest plan for your life. This is why you need a budget. Still not convinced? Well, here are five reasons you need a budget.
- Subverting Subscriptions
In the digital age of services like Netflix, Amazon Prime, and Apple Music, money can quickly disappear to monthly subscriptions. They might not seem like a lot, but these subscriptions do quickly add up. By creating a budget, it’s possible to see how much these services can quickly eat away at your paychecks and to decide whether or not they’re actually worth it. Do you really need Netflix, Hulu, HBO, and Prime video all at the same time?
- Start Saving
Having a budget allows you to make smart choices about how much and how often you want to save your money. The best time to start saving was twenty years ago, but the next best time is today. One of the most important things that you can do when you’re young is to save. This is because putting away money when you’re young gives it time to grow and accumulate interest, which you’re going to need when you want to retire. Dr. Fisher puts it this way, “You can either use your twenties to set yourself up for the rest of your life or spend the rest of your life trying to fix your twenties.” Likewise, you never know when you might have a rainy day and it pays to be prepared. The sooner you start saving, the better.
- Set Up Systems
Everyone has goals that they want to achieve in their lives, but without a system in place to accomplish those goals, they won’t happen. As you might be able to guess, budgeting is a key factor in the systems process. By actually looking at the money you have and earn, you can track out a reasonable and sustainable path to get to your goal. Imagine you want to buy a thousand-dollar TV. This is a lot of money all at once, but if you budget and create a plan to save $100 a week, you will eventually reach your goal. Budgeting can take your dreams and translate them into reality.
- Stop Spending
One of the worst habits to develop is a habit of spending. It is very easy to get into habits of spending that may be unnecessary, and these can place a substantial drain on your resources. For example, if you buy a coffee every day, this can form a habit of spending. Oftentimes these habits build up slowly over time without us even realizing it. Forming a budget can help you spot these habits and correct them if it necessary. On the other hand, budgeting can also help you plan for these habits if they’re important to you. If you want to have coffee every day, budgeting will help you find a sustainable way to do so.
- Stay Sane
Money can be stressful. Whether it’s worrying if you’ll have enough or deciding on a big purchase, questions of money can plague your thoughts. However, keeping a budget can help to alleviate this stress in a number of ways. For one, it will easily let you determine when you have enough, and when you can afford a big purchase. This is because, with a budget, all your income and expenses are written down in one place for easy access and understanding. At the same time, a budget can also help to get these questions out of your thoughts by putting them down on paper. Budgets allow you to turn your intangible worries into solvable problems.
There are plenty of reasons why you need a budget, but these are a few pretty good ones. Whether it’s saving up for the item you’ve always wanted, or just relieving the stress in paying your bills, budgets are practical and important. While it might take an afternoon to get sorted out, you need a budget and it is definitely worth it.
