There are plenty benefits of budgeting that will transform your life and your money.
Budgeting is the core of all things personal finances, and there are many reasons why!
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A budget will absolutely change your life and yields so much fruit in your life.
Even beyond the numbers!
Table of Contents
Why Budgeting Is Important
Having a budget is the first step towards financial peace.
In the past I would’ve said more money is what leads to financial peace.
Budgeting is not an easy feat and it’s easy to give up. I’ve been there.
But having a budget honestly does transform your life and your future.
In the last five years I have had around £100,000 pass through my hands from my salaries.
The only way I was able to take chunks from that six figure sum was through a budget.
I took chunks for buying a house, a professional qualification and build my investments.
Ultimately, you’ll reach you money goals through having a plan for your money.
10 Benefits to Budgeting
As I go into these ten benefits of budgeting my aim is to open your eyes to the possibilities.
I hope you’ll begin to appreciate the importance of budgeting.
Secondly, I hope you be inspired to see your budget as more than an expense tracker.
Tracking your outgoings is part of it, but there’s so much more.
There are various methods of budgeting.
Whichever method you choose I just want you to start.
By doing so, you’ll reap the rewards of living life on a budget.
Get started by getting our budgeting spreadsheet template to take control of your money and reach your financial goals.
1. Budgeting Gives You Control
A budget is you telling your money where to go instead of wondering where it went!
When you budget you gain control over your money.
This control comes when you command what happens with your money.
You dictate where every penny goes and what happens to it.
Control also means you become very intentional about your money choices instead of living paycheck to paycheck.
This control is what scares and intimidates people at times.
But if you don’t control your money, your money will control you.
Having a budget gives you the ability to take control of your money.
2. You Gain Oversight
Imagine driving a car without the fuel gauge.
Or using your phone without knowing how much battery is left.
That’s what it’s like to have money without a budget.
A budget gives you oversight into how much is being spent before you run out.
You’re able to see how much is going towards food, luxuries, bills, then assess whether you can make any changes.
We do this via the Money Dashboard app, really great to see all your bank accounts in one place.
This informs you of what kind of lifestyle you can afford and empower you to live within your means.
3. Enables You To Plan Ahead
Phone batteries run out, we know this.
But what do you do when you have a long journey ahead of you that your phone battery won’t last for?
You buy a powerbank!
A powerbank is a portable charger that you’ll use to give you more battery life to last the journey.
In the same way, budgeting tells you how far your money will take you before you run out.
Having foresight gives you power to things purposefully.
Foresight is putting money aside to be spent on your birthday or repay an annual bill.
It’s repaying your debts before you switch to part time work as planned.
Most people’s budgets fail because they don’t incorporate these future expenses.
4. Dreams Become Reality
We all have dreams!
Whether it’s to buy a house, take a 6 months career break or pay off debts.
Some hope and pray for their dreams to come true, but nothing just happens.
Financial dreams only come true with a plan.
Start by finding out how much your dream needs.
Then break down the amount into yearly, quarterly, monthly or weekly goals.
So when you look at your budget you’ll find ways to put money towards your dreams.
I’m no fan of cutting out luxuries just for the sake of it.
But I am a fan of cutting luxuries for the sake of my dreams to materialise.
Our dream of buying a house came true by saving on a budget.
Dreams come true, with work and intentionality.
5. Makes You Money
Yes, a budget enables you to earn more money.
We have more money than we realise because we don’t fully keep an eye on our expenses.
Your budget will tell you where you can cut back on.
Switching your bills to another provider or spending less on takeaways is an example.
This one act alone will give you an instant pay rise!
Apart from cutting costs, a budget will enable you to save and invest.
We budget using the pay yourself first mindset.
This is where our savings and investments get deducted before our living expenses.
You can put money towards investments or purchasing rental properties.
Consequently, a budget ensures you’ll pay yourself first.
6. Brings You Financial Peace
One of the greatest benefits about budgeting is financial peace.
Being at peace about money is such an understatement and a huge benefit.
Money worries and concerns are sadly a huge part of our society.
We worry most when we don’t know what’s going on and the same is true with money.
We worry when we’re thrown off track by an unexpected cost.
Financial peace, again, is more than the money.
Financial peace is when you no longer live paycheck of paycheck.
It’s when you have both present and future needs taken care of.
Budgeting gives you the power to make decisions that lead to financial peace.
7. Guilt-Free Spending
I love this one!
A lot of people see a budget as a restriction to enjoying their lives.
This couldn’t be further from the truth.
One of the benefits of budgeting is that you can allocate yourself guilt-free spending money.
This is money you can spend on anything that you want with no shame!
Have you ever bought something only to realise you needed the money for something else?
Or found yourself back in the overdraft or credit card because of overspending?
A budget will allow you to do what’s necessary (bills), what’s important (savings), and what’s fun (spending).
Here are 25 fun things that you can do whilst living on a budget, fun doesn’t mean expensive.
In short, a budget lets you have fun responsibly!
8. Budget Opens Up Money Chats
This benefit of budgeting is important to me!
Money becomes part of the family conversation.
Money shouldn’t be something you argue about, keep hidden, or avoid.
Imagine having a casual money chats with your partner about investments.
Or getting your children excited about savings.
Money talks don’t have to be serious and feel like an interview.
Really casual everyday money conversations can start with budgeting.
As a result this builds your financial literacy as a family.
This is our heart at Skilled Finances!
9. Builds Financial Confidence
Budgeting makes you more confident about money in general.
The more confident you become about money the more savvy you’ll be.
Financial confidence is being confident in your financial decisions.
It’s about believing in yourself that you can accomplish your financial goals.
Financial confidence is the key to save £20,000.
The key to putting money aside for your child.
The key to start investing for your future.
The practicality of money is easy.
It’s easy to open an account and put money into it.
Or, to transfer money from your account to your credit card.
But it takes some work to believe you can be debt free or to see yourself having £20,000 saved.
Budgeting gives you the confidence to believe that you can achieve your financial goals.
10. Healthier Relationship With Money
Your relationship with money is the core to how you behave and interact with it.
Your money beliefs influence in how you use money and how you see money.
An unhealthy relationship with money can lead to an unbalanced money lifestyle.
Remember, money should go towards what’s necessary, what’s important, and what’s fun.
If you think money should be enjoyed today you may forget what’s important.
If you believe money is hard to get you may deprive yourself of fun and only think of what’s important and necessary.
Budgeting enables you to find balance and manage your money in the right way.
Strike a healthy balance between living expenses, future goals and present fun.
As a result, your relationship with money will become better.
Benefits of Budgeting
These benefits of budgeting have opened your eyes to see why budgeting is important.
It’s not as exciting as cryptocurrency or buying a house.
However, it’s the foundation that will hold all of those things together.
Check out our budgeting template spreadsheet to reap the rewards of having a budget.
Take Action
Which of these benefits of budgeting resonated with you the most?
Share this with your friend, family, or partner and have a casual chat about budgeting with them.
Get in touch with us and let us know how you’re getting on. We’d love to hear from you
Knowledge is powerless without action
So take action, and take care
Thando