7 Reasons why you need a budget

I know how easy it is to allow financial obligations to get in the way of securing my financial future. One of the best ways I make sure my spending habits don't overwhelm me is to create a spending plan or budget as we know it. 

For me a budget is like a blueprint for financial success. You might be able to get by without one, but having a budget will help you stay on top of your bills and help you to save and invest. Most importantly, you will enjoy life.

I know the word “budget” gives most of us mental images of limiting ourselves from doing all the enjoyable things. In my opinion, a budget is just another word for a plan to tell your money where to go.

While it might be true you have to trade off certain pleasures to secure your financial future, I would argue that it ain't fun spending money you don’t have, even if it is on ‘stuff’ you really want. However, a budget is a guide to help you take control of your money and ultimately reach your financial goals. Just like the gym and eating healthy helps you to lose, maintain or gain weight, a budget will help you to handle your money effectively.

The problem is that most of us don't know how to budget. A good budget is based on reality. When done truthfully a budget do remove unnecessary spending that takes money away from you. It's a planning tool, not a restriction. It will show you ways you are spending your money and if you don't like it you can change it to reflect your goals.

I'm sure you have heard stories of the rich and famous who have filed for have filed for bankruptcies or defaulted on their home loans or who are in debt.

One thing about their situation is clear: It doesn’t matter how much money a person has, people are easily able to spend it.

I've also learned that the only time most us shift our financial responsibilities is when we are under an enormous financial strain. For example, when you are struggling to pay off your rent or car payments that's when you decide to downgrade your DStv or cancel your gym membership. Basically, you are reacting to events as they happen. You don't have a good thought out plan for your money and you are not really in charge of what goes in or out. And that is the reason why no matter how often you make financial changes to you budget you don't see any improvement to your overall situation.

What budgeting actually does is clearly show you how you allocate your money and present you the choices on what stuff to enjoy – based on your financial limitations. It will save you the grief of overspending and being too much in debt.

If you want to change your future, then you are going to have to change your present. Your are where you are today because of all the decisions, directly or indirectly, that you've made. No one likes to change. We do however like the results that change gives us, but we don't like to change. So in order to see that change in this lifetime, here are 7 reasons why you need a budget.

Learning how to control your money involves several essential steps.
  1. Acknowledge that getting in control is the key to your success.
  2. Record your sources of income and when you receive them.
  3. Develop your personal spending plan. Determine how much of your income is spent on monthly bills and necessities. Plan how you will spend or save any remaining funds.
  4. Plan for irregular bills such as car insurance and set aside some money for unexpected expenses.
  5. Once you have established your personal spending plan, start looking for small ways to make improvements, ways that you may even enjoy.
  6. Make sure you review your budget several times a month or whenever there is a significant change in your income or spending. This is to keep track of your spending behaviour. 
  7. When you know you are not trying to “budget,” that is limit yourself from doing all the enjoyable things you are doing now, it is much easier to get the system working. You see, you can use your money plan to control your money and achieve all your financial goals.
There will never be an ideal time, or good time to start a budget  you just need to bite the bullet and do it. Once you have gotten in control of your moneyyou are well on your way to financial success.