What is budget for if you are not broken?


Most families have good business months and bad business months from time to time. The majority of people are still well off, though being not fully financially independent. If the person does not live from paycheck to paycheck and does not struggle, he or she may question the necessity of a personal budget.

So why to budget?

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To put it simply – budget keeps us within the direction we have once chosen. Everybody has his own priorities in life and the way we earn, spend and save money should reflect our goals, though they may change in the course of life. In addition budgeting allows us to make a clearer picture of where our finances are spent in vain. Having a budget we can get to know for sure where our permanent stock is and what amount we can sacrifice for our new goal.

Budgeting and side living for the win

Let’s look at the simple example: you may have drained your saving account for some emergency, let’s take unforeseen medical bill for instance. It goes without saying that emergency fund should be filled back in as soon as possible otherwise you will be forced to apply for instant loans to manage the expenses. Budget will be a great help for you in this case to figure out the areas where some amount can be saved, you may reconsider your food budget or reduce your entertainment costs. Budgeting will allow you to define the sum and amount to stick to, so that your financial aim is achieved in a due time. Analyzing the sources of income you will be able to find the additional ones to add up some side money to your current available funds. Quite often people miss the opportunity to make money with their hobby or some other activities, the process of budgeting makes such sources more visual and allows you to breathe easier overall.

Budgeting prevents from going off head

In case you do not have any financial aims set in and the need to keep strictly within the budget at present moment, still it can prevent you from walking in the clouds. It’s easier to live simple if you are kept restrained with your own inner intention.

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In course of life everybody has to tighten belts from time to time to achieve certain aims. The thing everybody reaches out for is the house of his own, so most of us try to purchase it immediately after graduation. Extreme economizing becomes the priority of your financial life for a certain period. As soon as the home is bought and everything is settled, another challenge is often set in. You want a new car or choose for a holiday cruise, but the result is the same – the strict budgeting is back. Then after the next goal is achieved as well, you may start to breathe easier and spend more until some emergency comes out of the blue. Dealing with unforeseen expenses you may learn two lessons at a time – it’s nice to have emergency fund and it should be filled in as soon as possible. The budget allows you to get the overview of your financial state any time and you are pretty nice aware of where your cash flow is directed or can be directed. Proper budgeting helps to save for the future and secure yourself against the emergency cases.

It’s my firm belief and advice to you – make your budget to keep yourself on track. I choose budgeting, what about you?