The simple reason why many men are broke is because they do not budget their money. There are many people who blame their financial state on the fact that they do not earn enough. What such people do not realize is that no matter how much money a person can have, it that money is not planned properly, it will not show any results. When financial advisers tell you to save, you better listen, this may just be the difference between you being broke and you being financially stable and independent. There are a number of reasons why you need a budget.
It helps you know what you can afford
When you work without a budget, you are more like a man who takes all his money, puts it in his pocket and goes around buying whatever he wants until the money gets finished. If like many other people, you do not have an endless supply of money, your budget helps you to know what you can afford on the funds you have. If you cannot afford to buy it now, the budget tells you when you will be able to.
It gives your life direction
If you are a financially healthy individual you should have both long term and short term goals that involve your money. You probably want to pay off your credit card, you want to pay the bond for your house or you want to save money for your child’s school fees. There is no way you will be able to accomplish any of your goals unless you know exactly how your money is being used.
When you draw a budget, you are forced to define your goals according to what you can afford. Budgeting allows you to remove things from your expenditure that may prevent you from reaching your most important goals. So what, if going out every weekend does not fit into your budget but you are still able to build that dream house you want.
You secure your retirement
No matter which way you look at it, the fact that one day you will grow old and eventually be unable to work is as certain as death. A budget allows you to plan for your retirement. It tells you how much money you are able to save in order to live a comfortable life when you retire.
When you start to budget early in life as soon as you start to work, it will be a lot easier for you to build a nest for your retirement. So even if you feel the pain of not having everything you need now, you will enjoy a more comfortable life when you no longer have the power to work.
You are ready for emergencies
When you budget, you know how much money you put aside for that day when your car suddenly breaks down or your child is taken ill in the middle of the night in the middle of the month. Financial advisers will tell you that your budget should allow you to slowly create a comfortable nest of between three to six months of your monthly expenses.
Sheds light on spending habits
When you follow a budget, you are forced to analyze your spending habits. It shows you where your money is leaking. That telephone bill which drains your resources and the expensive cable television you hardly watch becomes clearer when you put it on a budget.
In this age of applications, budgeting should not be difficult. You can Google some apps that will help you to make the process a breeze.