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Six Benefits of Creating a Personal Budget

Presented By: EJ Cooksey | Tuesday, April 01, 2008 | , , , | Comments

A personal budget is a spending plan. It is your single best tool for knowing where your money is going and how much you have to work with. Of course, just the mention of the word budget can send even the most structured and organized person running for the hills. A personal budget, however, has several tremendous benefits. Among them are:

#1: A budget makes it easy to save and have extra money.

By tracking your expenses and income and controlling how much you spend on variable expenses, you will quite likely find that you have more money than you thought you needed. What are you going to do with that extra money? Of course the experts will tell you to save it and that’s probably a good idea, but maybe you could set aside just a little bit of that extra money to do something fun - like take a vacation or go to that five star restaurant you’ve been anxious to try.

#2: A budget saves you time.

How long does it take you to collect information at the end of the year for taxes? Even if you don’t do your taxes yourself, gathering all of those financial documents can take days and can be extremely stressful. When you have a personal budget, all of your expenses and income, including your taxes, are documented. This is particularly the case if you use a spreadsheet program or accounting software.

#3: A budget makes it easy to track, and control, your spending.

It gives you freedom from the stress of not knowing if you have enough money to cover certain expenses. It is so much better to control your finances than to let them control you.

#4: A budget can reduce family and personal stress.

A personal budget creates an environment of teamwork and communication rather than one of stress and blame. Everyone is accountable for the spending decisions made and the financial goals you’re striving towards.

#5: A solid budget makes it easy for you to make spending and investment decisions with confidence.

Have you ever had the chance to invest in something but you weren’t sure if you could? With a solid budget in place you know exactly where you stand financially and your investment decisions can be made with the right information at your fingertips.

#6: Budgets help you plan for the future with ease and confidence.

Are you saving for your retirement? If yes, are you saving the right amount or should you be saving more? Are you going to need a new car soon? If you are, will you have the money for it? A budget gives you the ability and the confidence to plan for the future because you know exactly how much money you have to work with right now.

There really is no downside to personal budgeting. It reduces one of the most significant causes of stress and it puts you in control of your money and your future.

Recommended: Guide to Family Budgeting

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