6 Top Reasons to Set Up a Personal Budget

6 Top Reasons to Set Up a Personal Budget

Benefit #1 - Shows your financial position clearly. Without a budget you are left in the dark as to how much you need to save and how much to put aside for emergencies. It shows whether your spending is within the limits of your income or whether you are living beyond your means. You will see how much of your income is being spent on just paying back previous credit card purchases - including the interest.

Benefit #2 - Budgets help you set savings goals. Once your budget is set you can easily see how much you need to set aside for savings ands emergencies. That amount can be turned into a savings goal. That money needs to put aside for future costs.

Benefit #3 - Helps you commit to your goals. If you want to make the required changes earnestly, the budget goals will help keep on track. Now you can see what will happen if you go back to your old ways. When you see something you want you now have a choice. Spend now for instant gratification - or wait and feel a whole lot better about yourself.

Benefit #4 - Keeps you from spending money you don't have. Each time you spend, it either adds to or detracts from, your overall financial position. The personal budget can show you the impact of your proposed expenditure in advance. You don't have unlimited income. If you spend more than you earn you pay the price and the price is interest. This interest is often the cause of your hardship now.

Benefit #5 - Puts you in control of your finances. If you've prepared your budget correctly, you will see how much you have available to spend, after taking into account your debt repayments and savings requirements for your future needs. This information can take away the guilt you may have felt when purchasing some item(s) you knew you couldn't really afford. With a budget you know what you can afford and what is beyond your means. When you know you can afford an item you really want, the purchasing experience will be much more enjoyable and rewarding.

Benefit #6 - Shows the progress to meeting your goals. Don't leave you budget in the kitchen drawer once it is completed. Refer to it weekly, or at least monthly. It is your guide to debt freedom. Keep checking your progress. It will give you the motivation to make the right decisions for you and your family.

It just takes a little time and commitment. Imagine how you'll feel once the debts are paid down and you have savings put away. It will all be worth it.