Why Budgeting is Essential to Success

Money is a huge stressor in most people’s lives, but it doesn't have to be. Creating and sticking to a budget can help alleviate the money-related stress in your life and let you start focusing on more important things. We optimize what we track It’s well known in business that we optimize what we measure. If your boss tracks your arrival time at work, you’ll likely become very punctual. This also holds true in our personal life. People who track their weight or keep a food journal have a greater tendency to lose weight or eat healthier. This holds true of budgeting too, as you become more aware and realize the importance of knowing what your spending habits are. Seeing is believing Sometimes it’s hard to understand where your money goes. Setting up a budget might reveal just how much your car is costing you a year, when you factor in insurance, maintenance, registration, and fuel. Allows you to prioritize One of the easiest ways to understand where your money goes is to figure out what percent of your budget is taken by each expense. If something you don’t really get much value from is taking up 15% of your income, you’ll probably want to make some changes. Although a lot of expenditures are fixed necessities, you’ll see if your spending aligns with the life you want. Strategically cut costs Once you see what items are taking your money, it becomes much easier to decide where to start reducing those expenses, whether by finding cheaper alternatives or reducing or eliminating their usage.


Controls impulses


Planning ahead is the best way to control our impulse purchasing, whether in a budget or in a grocery list. Creating a detailed budget will help keep you from impulse purchases that seem fine in the moment but really don’t bring you the return of so many other expenditures.


Avoid lifestyle inflation


One of the easiest ways to never save money is to start spending more money as soon as your income increases. This is incredibly common and referred to as lifestyle inflation. As soon as you get a raise, you buy a new car, and while you have a new car, your financial flexibility is no greater than it was before your raise. Gives you control What creating a budget does is help you control your spending and your life. When you get your spending under control, you can stop stressing about money and realize how much freedom you have in how you spend your money and how you make it. As you get out of debt and start saving, you’ll start to build a cushion that will let you take bigger risks, whether in investments, starting your own business, or even just being bolder at the job you already have.

Author Bio

Jared Jacobs has professional and personal interests in technology. As an employee of Dell, he has to stay up to date on the latest innovations in large enterprise solutions and consumer electronics buying trends. Personally, he loves making additions to his media rooms and experimenting with surround sound equipment. He’s also a big Rockets and Texans fan.



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