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Deciding to create a budget each month can seem like an overwhelming proposition, but these seven benefits highlight the importance of budgeting, and can make it worth the effort.
You may have wondered about the importance of budgeting and heard the word “budget” thrown around throughout your life. Often “budget” is used with a negative tone. If you’re like me, you might have just decided to just avoid that stress.
Maybe you’re like me, and you never understood the importance of budgeting and all of the great benefits that it offers.
You’ll see how it gives you permission to spend, puts you in charge. It helps you identify what’s important to you, and can even improve your marriage.
After learning all of these amazing benefits, you’ll be ready to dive into budgeting head first.
This post is all about the importance of budgeting and seven surprising benefits.
1. Gives You Permission to Spend
I’m going to start here with my favorite benefit. Budgeting gives you permission to spend. The word “budget” typically brings negative thoughts to mind, but actually, when you have a plan, you get to decide where your money is going.
For example, if you love going to Starbucks, after you’ve budgeted your required expenses, create a fund or cash envelope for Starbucks. If you put $50 in your Starbucks fund, then you have $50 to spend anytime you want on Starbucks.
Once you create the parts of your budget that are important to you, you have complete freedom of how to and when to spend that money.
2. Puts You in Charge
When you create a budget, you are putting yourself in charge and taking control back from impulsive spending and the dreaded mysteriously disappearing money.
If you have a problem, like I did, with money just mysteriously disappearing from your accounts, you will love this benefit.
No more will you wonder where your money went. When you begin to budget, each time you spend, you will know exactly where it went. You were the one who wrote it down!
You can then choose to continue to spend that money on the same items the following month, or make a change. It’s completely like a choose your own adventure game.
3. Identifies What’s Important To You
When thinking about the importance of budgeting, it really just comes down to what is important to you.
After budgeting your money and looking back at the end of the month, you’ll be able to see exactly where all of your money was spent. You can quickly see where you placed items of importance for the month.
If you’re happy with your spending, you can keep your spending budget the same the next month. However, if you’re unhappy with where your money went, you can change it.
You have the power to spend your money on what is important to you, and to cut out spending on things that are less significant.
4. Improves Your Marriage
One of the leading causes of divorce in the United States is money arguments. In order for a budget to work in a marriage, both people need to create the budget together and stick to it together.
Full disclosure, ending money fights doesn’t happen overnight, but the more you collaborate on your spending, the easier it is to collaborate on other things in your marriage.
Budgeting for a family definitely requires teamwork.
Many times, couples keep their finances separate, or one person is in charge of paying the bills and tracking the money. I can tell you from first hand experience, this is not ideal for your marriage.
Having separate accounts or having only one person with knowledge of what’s happening with your money can easily create a climate of distrust or jealousy. Eliminate these negative consequences by working together on your budget.
I highly recommend one person being in charge of paying the bills, but only after a budget has been agreed upon by both people.
Also, both partners should be actively paying attention to their daily spending, in order to stay on track.
5. Increases Contentment
Once you begin to budget your money, you might discover there are things you’re spending your money on that are unnecessary.
One of my big realizations was that every penny that I spent equated to a number of hours that I had to work to earn that money. That made me think twice about if I wanted to trade two days worth of work for that dinner out or not.
You might discover that you’re content with most of the things you already have, or you might decide to only purchase things that you really like going forward.
Another thing that can contribute to contentment is to keep a gratitude log. I love this simple gratitude journal to keep track of a year’s worth of thankfulness.
6. More Generosity
One of my favorite parts of doing a monthly budget is deciding how much to give or donate to others. Regardless of how tight our budget is, there are others who are more in need, and even a few dollars can help.
Generosity is proven to make you a happier person, and your generous spirit can bring others joy or relieve a weight.
Some possible benefits of being more generous include:
- More positive outlook
- Better mental and physical health
- Higher self-esteem
Some ways to be more generous:
- Tithe 10% to your church
- Donate to a local charity
- Buy gift cards and hand them out at your local coffee shop
- Keep a few extra dollars in your wallet. Believe me, God will send someone your way that really needs it.
If you have ways that you love to be generous, add to this list with a comment below.
7. More Prepared for Emergencies
Back before I began budgeting, every little problem turned into a major emergency. If my child needed money for an unexpected field trip, or a tire went flat on the car…it all became a crisis.
Once I began budgeting, I started doing three things that kept small problems from becoming major problems. You might try these things also.
- Create a buffer amount in your budget. This should be about $100-$200 a month, depending on your income for small problems or overages that might come up in the month.
- Create sinking funds. Sinking funds are funds that you add a little bit to each month, so that Christmas doesn’t surprise you each December, or an oil change that’s due every 3 months becomes a big shock that it’s required.
- Save 3-6 months worth of expenses. This becomes an emergency fund, and can help you get through true emergencies.
You can read more about some of my favorite suggestions for budgeting in the article “5 Insanely Good Pieces of Budgeting Advice for Success“
I hope this helps you identify the importance of budgeting, and seven ways it can benefit your life.
What benefits have you discovered from creating a monthly budget that have impacted your life? I’d love it if you’d contribute to this list in a comment below.