Why Budget??
Why do we budget? Why plan or project out your income and expenses?
You would think it is a simple answer, to be better prepared and have some certainty around your finances, to not get yourself into debt when a big expense comes up.
However, you can also budget for multiple other reasons as well, such as trying to get ahead with savings or investing, opening up a business and even planning for your first child.
The reason budgeting is a “buzz” word right now, especially on TV shows like “The Morning Sunrise” or the “Today Show” is because we have all seen that the Reserve Bank of Australia has been increasing rates and people are starting to feel a slight pinch in their hip pocket.
Not to mention, inflation has been increasing prices of our foods and other general expenses, and our wages have remained relatively low.
Therefore, to project the next month of finances, or even twelve months for those who are a bit more advanced, would be pretty handy given everything that is happening.
Meaning that you will not fall short when at the grocery store, a day before pay day, wouldn’t that be nice? To not have to delve into your savings and to keep building your wealth, rather than chipping away at it and becoming even more depressed as your savings account dwindles.
You would rather see those savings increase wouldn’t you? You have travel plans or plans to invest in the future? You want to start a family and give your kids the best start in life? You need money to do all of that and more, therefore you have a reason to create a budget.
I remember learning pretty quickly that if I want to achieve my dreams and goals, the success of achieving them come down to how much cash I have sitting in the bank and how much I earned.
Therefore, I learnt pretty early on that I needed to create a budget, and to focus on the carrot, not the stick. Focus on the reward at the end of the day, rather than any dollar figures or massive expenses coming up.
You are more likely to stick to and achieve your budget if you work towards something, rather than just create a budget for the sake of it.
Therefore, the reason you should create a budget is because of a deeper reason, a massive goal that is going to take some effort and work to make happen.
No matter what it is, you will generally find that there is a dollar figure that will help you attain that goal as well, no matter how big or small it is.
You could start budgeting for a simple weekend get away with your partner, or to pay off a debt, like a car loan.
You need to imagine how it will feel to get away or to have no more debt or responsibility to pay back that loan, use that feeling as fuel to project out your finances and make it work.
The reason why I am going through this is because I want to focus on really pounding it into you that budgeting is not for doom and gloom, in fact, budgeting is for thinking bigger and for hoping for the future.
We budget so that way, we can live a life that we have a little certainty over and can give us a little bit more purpose around our work and of course around making extra money.
Budgeting is not hard either, it can be made simple, which is why I am going to be giving you a very simple way to budget in my next blog, where I will show you how I have budgeted to save for our first house, a few cars, a wedding, a second home and a Europe trip/multiple other holidays over the course of the last seven years.
All of which would not have happened unless I learned how to budget and stuck to it (which is always the hardest part), so make sure to look out for my next blog article and until next time,
Take Back Control
