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Why You Need a Budget

The secret to your financial success is your ability to create and stick to a monthly budget. Behind every success is a solid plan. A budget is a plan that allows you to gain control over your finances, which is critical for financial success. There is some confusion about what a budget is, or what type of people should live on a budget. When you hear the word budget what do you think? That if you live on a budget that you can’t go on vacation? Or that you can’t eat out or buy new clothes? What type of person needs to live on a budget? A poor person, or a person on a “fixed” income? A person that doesn’t have enough money? The truth is that none of the above are true. In fact, everyone should live on a budget regardless of your income or net worth; Regardless of how close you are living to the edge.

A budget is your plan for what you will do with your money each month. With your budget, you determine who to pay, what to buy, how much and when. You determine how much to save, how much to blow, how much to spend on clothes, how much to spend on electricity, when to pay the mortgage, and if you can afford to go on vacation. When followed, it allows a dedicated space and time for each expense. With a budget, there is no need to worry that by buying clothes that you are spending gas money. There is no need to worry that husband and wife are both trying to spend the same last few dollars - leading to overdraft. When a question arises about what to pay, follow the budget, just as a construction worker follows the blueprint.

Benefits of a budget:

  • Provides structure and order

  • Forces you to keep your priorities in order - Prevents spending on lower priority items and leaving higher priority items unfounded

  • A budget guarantees that the things that are most important to you are always funded.

  • Puts control of the flow of your money and your life back into your hands - you decide exactly where your money goes

  • Eliminates fear and guilt spending

  • Allows you to measure your success and identify your failures. Makes goal setting and planning possible

  • Eliminates crisis living and panic

A budget is not:

  • Restriction - A budget does not mean that you have no money and no fun. Part of the budget is spending money, entertainment, date night, hobbies, and whatever you want to put in the budget.

  • Lack, poverty, control - A budget does not mean that you have to go without, or that you do not have enough. Even when you become a multi-millionaire, you must still live on a budget every month

  • A budget does not mean that you cannot buy the things that you want. Does not mean that you cannot go on vacation, buy new clothes, have spending money, enjoy your hobbies

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