It is the misconception of many people that a budget is only for people with high incomes, not for people who are living from paycheck to paycheck. Fortunately, this isn’t true and every household can benefit from a basic budget. In fact, a budget can be extremely beneficial to households of any income.
Not tracking purchases and bill payments can give someone the feeling of no control over their finances. By creating a budget, the individual, couple or family have complete and total control over their money. They know where it’s going, when it’s going there and how much will be left over for other things.
Without a budget, it can be easy to throw money away on frivolous purchases. However, creating a budget and knowing how much needs to go towards bills, savings and other accounts and how much is leftover for spending helps to build discipline.
It’s true, having a budget can help reduce stress when trying to figure out where the money is ‘coming from’ for paying the bills. Knowing how much money is coming and where the money is coming from helps put a person in control of their finances, thus greatly reducing any stress that may be coming from financial issues.
A budget can show a family where extra money is, it can also help them divert that money toward more important things such as reducing debt. By reducing debt, they can then free up additional money for other things they may desire, such as a new television or they can put that money into another type of savings.
Create Common Goals
Whether they’re common goals of the family or the common goals of a couple, a budget helps people come together over a common goal. That goal can be as simple as a new television or it can be a vacation getaway. Either way, a budget that includes common goals can help bring a household together.
A budget can teach a person where to cut down on expenses, thus teaching them to live below their means. By doing this, more money can be diverted into a savings account whether that savings be a rainy day fund, a college fund, a retirement fund or another type of savings.
By knowing how much money a household has, where that money goes and when, the household can easily avoid overdraft fees and other fees that may be accrued by overdrawing or other issues. This can be extremely beneficial, as it saves money and even reduces stress by knowing there won’t be any unexpected fees.
A good budget is the foundation of a comfortable household. A budget can be beneficial no matter what the family’s income. It can also bring families together, increase savings and help people get out of debt, making the budget an extremely beneficial part of the household.
This is a guest post by Patty Kleen.
About the Author: Patty Kleen is a full-time writer with a passion for personal finance. She knows how important it is to stick to a budget, especially as a freelancer with a changing income. She also writes about credit repair, unsecured bad credit loans, and money saving tips for the holidays.
Do you use a budget? How has it helped you and your family? Also, be sure to check out World of Finance featured on Invest in the Markets for an interview about investing. If you would like to be notified via email of new articles published on World of Finance, be sure to subscribe for free updates.