Many people hear the word budget and automatically think it’s a restrictive, difficult endeavor. Surprisingly, creating and sticking to a budget is an extremely liberating undertaking. It can be very rewarding, and in a day and age when spending money is so easy, a budget can alleviate the stress of managing money.
A budget shows you exactly where your money goes.
Before my husband and I started a budget, we would look at our bank account at times and wonder where our money went. It is so easy to simply swipe a debit or credit card, and no one really wants to keep track of every single transaction. When you check your account just to ensure there is enough money in there, you really don’t have much control over where it’s going. The benefit of creating a budget is that every month you know exactly where every dollar is going. Once every dollar is actually accounted for, you will realize that you make more money than you think.
Find a system that works for you.
There is no right or wrong way to make a budget. Whatever will allow you to stick with it is the correct method for your family. You can make a simple spreadsheet on a computer, write it out on paper, or use your bank site/app to organize your spending. Since my husband is a math teacher, he started by creating a spreadsheet that lists our monthly income, and then a list of all the money we spend to make sure what goes out is less than what comes in. As time went on, we tried different methods to find the best fit for our family.
If you are confused or just need a place to start, Dave Ramsey has a book called Financial Peace, which is what his Financial Peace University class is based on. After reading this book, we really felt like we understood how to create and stick to a budget that works for our family.
Benefit #1: It helps your marriage!
Have you and your spouse ever argued over money? I think it’s safe to say we’ve all been there, especially considering that money is one of the top issues couples fight about. Creating and living on a budget can be liberating in a relationship because both parties understand where all money is going. This decreases arguments over purchases. Instead of bickering over the hundred dollar trip to Target, or a new set of golf clubs, that money has already been accounted for. As long as you’ve budgeted for it and everyone knows how much is available to spend in each category, there is no need for disagreements. If you want to alleviate stress in your marriage, work together to create a budget.
Benefit # 2: It helps you plan ahead.
Want to plan ahead for your next big vacation, instead of putting it all on a credit card? Add it to your budget! Keeping your money organized with a budget will help you plan ahead when it comes to big events like weddings or trips, making large purchases, or even preparing for a future child.
When you have a goal of how much you want to save for that girl’s trip, family vacation, or the next wedding you are a part of, you can set aside a certain amount of money each month and save up for it. This will help prevent accumulating debt in the future by avoiding having to use a credit card. Your money organization will help decrease any stress you might have over the cost of everything, and instead, you’ll be able to enjoy yourself more.
Want to buy a new couch? Figure out how much it costs, determine how much you can set aside for it each month, and save up! It’s so much more rewarding to finally buy something you’ve been wanting after saving up for it. When you walk into a store and put it on your credit card, that instant gratification doesn’t last too long, and you won’t appreciate it as much.
This was especially helpful for our family when we found out we were expecting our first child. Obviously, we didn’t know exactly how much money we would need for him, but we set aside a certain amount each month as “baby money”. This helped pay for items in the nursery, diapers, and other essentials we needed. We continue to set this money aside as he grows in order to pay for childcare, clothes, and other items he needs.
Benefit # 3: It can help you pay off debts faster.
Once all of your money is organized and you can visualize where everything is going, you can see where you may have some extra money. Any extra money that can be put towards loans will help you get them paid off quicker. It can take some time, but slowly chipping away at them will pay off in the end. The key to getting debts paid off is patience. It takes time, but it is definitely worth it!
While it can feel like it takes a long time to pay these debts off, the reward feels that much better. It is so freeing once those monthly bills disappear and you have more disposable income. The sooner your debts such as credit cards, car, personal, and student loans are paid off, the sooner you can reap the benefits of doing more with your money. The possibilities are endless, as you can save more towards retirement, beef up your savings account, or simply save up for a big purchase or trip.
Take control of your money, reap the benefits of a budget, and don’t let your money control you.