You may have heard some people say “I’m too poor to budget.” Well actually what that means is, they’re too poor NOT to budget. If you’re reading this, you’ve realized there might be something missing from how you handle money. Maybe you were never taught about making conscious decisions for what happens to your earnings. Not your fault, many people grow up not thinking much about money until they’re stressing about it. But it’s never too late to begin! Here are four reasons why it is imperative that you have a plan for your money.
1. Never Question What You Can Spend
The internal dilemma where you are struggling to decide if you should spend money on a certain item that you want…that’s gone. You will quickly become accustomed to knowing how much extra money you have to spend as you like, and you’ll also begin to start setting money aside to save up for specific large ticket items.
2. Ability to Set Goals
When you are tracking how much money comes in versus how much money goes out, you are suddenly able to see how much of your money can be easily saved towards something you’d like to accomplish. Whether it’s putting a down payment on a house, or buying a new TV, you can now map out what amount of time it will realistically take for you to get there.
3. Ensure You Have Enough Money to Cover Expenses
After you set up your budget, you’ll clearly be able to see if you are living within your means or not. If it comes to light that your fixed expenses are more than your income, you will need to make decision about which expenses to cut back. This way, you’ll always have enough money to cover them. Imagine the stress that will be alleviated if you no longer had to worry about that!
4. You Are In Control
When you have a plan for your money, your money no longer controls you. Now you are calling the shots. If you have never known the feeling of being in control of your finances, I bet you can imagine how great that would be! You get to choose your priorities, instead of your money telling you what you must choose.
5. It Is Simple
I practice the habit of taking cash out of the ATM every Monday, and that is my allowed spending for the week. Does not get much simpler than that. When you choose to keep it simple, you are setting yourself up for success. Whether you practice "Monday Cashday" or some other version of that, choose an option that fits your lifestyle. The first couple months will take some tweaking and getting used to, but once you’ve vetted your plan, you’ll be on your road to financial freedom.