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Budgeting seems to have a really negative connotation does it?
When people are asked why they don’t have a budget they often say, “cause I don’t want to be told what I can and can’t do” or “I don’t have enough money to budget!” But these things are simply untrue; actually, they’re quite the opposite of what budgeting actually is.
So what is the purpose of having a budget? To understand your budget purpose, let’s jump into it!
Table of Contents
Budget Misconceptions
1. If you budget, you can’t do anything fun.
WRONG. Budgeting simply means you have accounted for your fun. Have you ever wanted to do something, like go on a trip or to a music festival, but then looked at your bank account and realized you might not be able to pay for it?
With a budget, you have a plan in place to be able to do those things. You already have money saved in anticipation of these events.You no longer need to worry about where the money will come from because it’s already there.
2. You need to either be poor or rich to budget.
It doesn’t matter how much or how little money you have. Having a budget can benefit everyone no matter their financial situation.
A budget is to help organize your money and teach you how to save your money.
Are you tight on cash? A budget can help you figure out how to save more and cut unnecessary spending. Do you have too much cash in the bank that you don’t know what to do with? A budget can help you create a blueprint so you know where to put your money and what to do with it.
3. You have to follow the budget religiously.
If you allocated 50 dollars to clothing for the month, however you find a dress you really want that costs 55 dollars you can’t buy it! FALSE. WRONG. NO.
Having a budget doesn’t mean you are limited to those numbers. It is just the structural foundation you will use to set your monetary goals.
Buy the dress! Then maybe don’t buy as much clothing the next month, there, problem solved.
Why should you budget?
Here is why I budget.
I’m a pretty simple gal. There are two things that ultimately bring me the most happiness (besides friendship and family obviously): travel and food.
I want to travel the world and have experiences that I will remember for the rest of my life while eating amazing food.
But how can I pay for travel? A Budget.
Budgeting has helped me save enough money to NOT ONLY be able to travel but to not be stressed out about my future. I was always worried about retirement, “if I do these fun things, what if I’m screwing myself later?”
However that’s not the case anymore. A budget is being intentional with your money. I choose to travel so, I cut out other things that aren’t as important to me. What is important to you?
Do you want to travel?
Do you want to eat out with your friends?
Do you want that new outfit?
A budget will let you DO WHAT YOU WANT WITH YOUR MONEY because you know exactly where your money is going. With a budget, you’ve created a plan that will help you realize those goals and cut out the unnecessary things you’re spending on that are getting in the way.
What Actually is a Budget?
- A budget is a plan. A plan for what you hope to do with your money. Pay off debt? Buy a house? Go to Bali?
- A budget is peace of mind. You don’t have to wonder if you can afford it anymore. You don’t have to wonder how it’s going to get paid for. You’ll already know the answer.
Why is having a budget important?
Having a budget will let you get to know yourself and your relationship with money. If you’re not happy with your financial situation, having a budget will help you realize what you’re spending on so you can make an adjustment.
The purpose of having a budget is to get control of your finances. Actually start knowing what’s going on.
The Bottom Line
A budget is creating a plan so you can set feasible, attainable financial goals that will allow you to live the life you want to live today, while being prepared for tomorrow.
You now know my budget purpose, what’s yours? Send me an email or reply in the comments!
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What are you saving for? Let me know in the comments!
I love this post – it has motivated me to budget more and it also sheds light on the positive side of budgeting. i’m all for having a budget, though i should definitely budget more on food as i love to splurge.
Hi Laura! I’m so happy to hear that!! Food is also where I struggle, going out to eat is just so easy and delicious!