Budget basics: Why the simple tips are the best for transforming your life
Sounds obvious, right? And yet, as adults we spend more than we should in places we shouldn’t, and we tend to neglect our savings as a result!
How interesting that there’s such a difference between our behaviour and what’s best for us. If you’re looking to boost your budget activities, you’re in the right place. Today the Citrus team are looking at a few simple, powerful side-effects of being fiscally responsible. Let’s see.
Never unexpectedly run out money
By having a budget in place, you’ll never run out of money without warning. A budget is basically a money plan, defining your financial objectives which will, in turn, allow you to establish how much money you have. These help regulate your spending so you’re never caught short.
That subject – being caught short – is a real threat to even a well-earning adult. If you don’t have a safety net of several months’ income at hand, having a budget is even more critical to protect you from the unexpected moments in life.
It also helps you achieve your financial goals and ensure your money works for you!
Learn about incorrect uses of money
With a budget in place, you may begin to see where you are spending unnecessarily. A detailed budget will outline any monetary shortfalls which, once recognised, can be fixed so that your financial situation improves.
There’s a real benefit to this: data. We know in a ‘gut feeling’ sort of way what we do and don’t do, and what triggers us to act in certain ways, but it’s generally a low-resolution feeling.
Having a budget that you stick to over time will begin to paint a picture. You’ll learn what affected you, such as a stressful situation that is common in your week, and with that information, you can begin to craft and alter your life so that you remove and minimise those situations that don’t work out.
In time, you’ll be able to live a much more productive life – without it feeling like a burden to do so. Very cool indeed.
Following a budget throughout the year can give your entire family a more accurate picture of their current monetary health. This will make the likes of family holidays and larger purchases less of a guess and more of a possibility.
That uncertainty is the key point here. Stress is often related to unknown outcomes or situations, and by having everything in order, you remove those ‘stressors’ that lead to stress itself. A big win for anyone.
A carefully planned budget can show where outstanding debt is weighing down monthly finances. Reviewing this budget will allow you to make any corrections or changes to your budgeting method that are needed.
Again, this builds up in time to give you an easily-led life where you are secure and making the right decisions.
Transform your bank account
Having a budget in place will enable you to transform your money into a tool. Instead of spending impulsively, you’ll be able to meet goals and even treat yourself every once in a while without feeling guilty.
It’s also a great skill to pass onto your kids when they’re young! Budgeting will help them to manage their own cash flow in the future by teaching them the value of money. This is a great asset – especially when you consider the number of expenditures they’re likely to make.
Build new habits
A good budget helps you to learn new spending habits and stick to them. Sticking to a budget will allow you to be able to pay off your most important debts on time – such as mortgage repayments, energy bills and the weekly shop.
You can also use budgeting to cover repayments for a debt consolidation loan which helps you repay all your owed money through one convenient transaction. Over time, this will let you pay them off entirely to leave you debt free.