I don't know what goes on in the minds of people who have an aversion to living by a budget. I think maybe they assume that living on a budget means depriving themselves of things they want. And if there is one thing Americans hate, it is depriving themselves. It's very American to say "I deserve..."
I don't understand that. It's a very entitled way of thinking. I don't think I deserve anything. In fact, in most instances, I think "deserved" is a stupid word to use, especially when it comes to purchases. You can either afford something, or you can't. What you deserve is irrelevant.
But I digress.
For those of you who don't yet live by a budget here are the 4 reasons you should reconsider your choice.
1. Budgets put you in control.
Budgeting is simply a financial plan. You have a plan in place stating how your finances will be spent, before said finances have even been earned or received.
Without a budget, it is easy easy for menial purchases to chip away at your bank account until there is nothing left. Sadly, too many people know the feeling of wondering "Where did it all go?"
With a budget, that won't be a problem. You still might not have as much money as you would like. But come the end of the month, you'll know where every red cent went.
2. Helps You Develop Self Control
I don't have any scientific research to back this up. I not going to even look for any. But I know that self control can be developed. The way you develop it is by practicing it. The more you practice self control, the more you develop.
Budgeting is an addition to your life that will have that added benefit of developing self control. Everyday you'll have small temptations to deviate from your budget. Maybe you'll want to run down to gas station to grab a snack. Or perhaps you'll want to eat out instead of eating at home. Each time you choose to stick to the plan instead of giving in, you are developing self control. Each time you give in, you are undermining it.
3. Not having a budget leads to debt.
When you don't live by a predetermined plan, it becomes very easy to rationalize purchases. This is even more true for big purchases that will require months to save for. Since you haven't been living on a budget, you don't really have any savings to use for the purchase. So you use your credit card. You tell yourself that you pay it off in a few months. But something comes up every month that "forces" you to only make the minimum payments. And before you know it, something else comes up that you are forced to charge, and add to your ever increasing debt.
4. Peace of Mind
Opposite of point 3, living by a budget helps you accumulate cash in a savings a savings account. When things come up, you make do as long as possible. Then when you can no longer make do, you pay cash. Instead of ever increasing debt, you have an ever increasing savings account. And you save money that would go to pay interest on debt.
Like I said, my finances aren't yet to the point that I would like. I'm still paying off debts that I accrued over 10 years ago. But I only have a few years left and they'll be paid off. I also have a little bit of money in my savings accounts. While I don't have enough to buy a decent used car with cash, I do have enough to handle most any automotive issue that might come up. I can also cover most home repair issues that might come up. This is a huge stress reliever.
Hopefully I've convinced you that a budget is a necessary item that your household needs. If you don't currently follow one, then start doing so. If you don't know how, keep coming back, I'll have more personal finance info coming soon.
Catch you next time.
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