Here are five reasons to make yourself a budget.
1. To finally know where your money goes!
Do you spend too much on takeout? The first step is to determine what your biggest expenses are. For a month or two, take note of your total revenue and all your expenses, and save all your bills. For example, if leisure represents the biggest portion of your expenses because you need to be the first to see every new movie, you'll know what needs to be revised in your equation.
2. To help you find balance between spending and saving
The bills are piling up and you're having trouble paying off your debts but you still dream of buying your own car or upgrading your phone? Making yourself a budget will help you prioritize your short and medium-term projects while maximizing the money you make. Adding a saving category to your budget, along with a specific objective, a date or an amount to reach will make the exercise even more concrete. This also goes for paying off your debts.
3. To avoid panicking in case of a nasty surprise
You can never see an unexpected event coming. That's why it's important to have a reserve fund. It's never too early to adopt good habits when it comes to your finances! A reserve fund is more than just money sitting in your account, it's your anti-stress solution in case of an emergency. It's also a plan that will keep you from going into debt if you need to replace your computer before the end of the semester or if your washing machine has stopped working. A big unexpected expense could unravel your budget in one shot.
4. To complete your projects without going into debt
You want to go back to school, move into your own apartment and visit Bali but only have $3.51 set aside? Saving helps you avoid relying on credit, all while continuing to enjoy life and have fun. Having clear financial objectives allows you to plan better, ideally without going into debt. However, if your financial obligations keep piling up, you shouldn't hesitate to ask for help.
To make reaching your objective easier, you can set up automatic transfers. It's quick, easy and worry-free!
5. To adjust before getting off-track
Finding and eliminating certain non-essential expenses can help if your budget is too tight. This way, you can decide if certain purchases should be reduced or eliminated.
Did you set out on a road trip on a whim or just bought the latest headphones everyone's been talking about? If you treated yourself a bit too much, there's always a way to get back on track. It's never too late to adopt good financial habits. If spontaneous spending has gotten you into a bit of debt, prioritize paying the debt off before new non-essential expenses.