Why You Need A Budget
Budgets can sometimes have a bad reputation. Just the word can make people feel limited, controlled, and just plain unexcited. I want to shed some light on what a budget actually is and why you need one.
What Is A Budget?
A budget is simply a plan for your money. Google’s exact definition of budget is “an estimate of income and expenditure for a set period of time.” Creating a budget means you create a plan for your money. This means you decide ahead of time where you want your money to go, rather than wondering where it went. Our emphasis on this blog is on the Zero-Based Budget. A zero-based budget means every penny of income goes in a designated category of the budget (either for spending or saving) and there is nothing left over. Remember, that doesn’t mean your bank account is zero, it just means you’ve given every penny a place to go and sometimes that will be into savings.
4 Reasons You Need a Budget
A budget is a plan for reaching your financial goals. Whatever your goal is: getting out of debt, saving for college, buying a home, giving outrageously etc. All of these goals require a plan to get there. You cannot wander into success. Creating a budget every month will help you consistently move closer towards those goals rather than wandering aimlessly and hoping for the best.
A budget reduces stress. Creating the first budget can be scary but it gets easier and easier each time until it becomes a piece of cake. Planning ahead reduces stress from unexpected expenses and the fear of not having enough money to meet your needs. The budget helps you know what to expect and be able to handle situations before they reach the stress point. You can finally be in control rather than feeling out of control. (See Also: How To Reduce Money Stress)
A budget gives you permission to spend. That one may seem hard to believe, but it’s true. No matter if you’re trying to get out of debt, save for retirement, or something entirely different, a budget will help you plan for those categories as well as the categories that allow you to have fun. When you complete your budget and see you do have 15% of your income going towards retirement and you also have $100 budgeted for new clothes, you can go shopping and spend up to the $100 guilt free, knowing you aren’t stealing from your retirement fund for a new dress.
A budget will help you prioritize. There was a time in my life when my bank statement could have been mistaken for a food log because it was just a series of restaurant purchases with some bill payments thrown in. And while that’s where we ended up spending money, it wasn’t where we wanted to spend money. Budgeting helps you to prioritize and take care of the important things without just hoping you’ll get around to it.
To create a budget is to create a plan. This is not something to be taken lightly, but something to be given much thought and prayer. Seek God’s guidance for making good decisions. Figure out what is important to you and your family. Make dreams, set goals, seek God. Whatever the vision is, you need a plan to get there. Luke 14:28-30 (ESV) says “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’ You can’t wait until you get to the end of the month to find out you don’t have enough money to do all the things. You have to plan ahead and by doing so you can make sure to take care of the important things first and not run out before your needs are met.
Deciding ahead of time where your money will go will help you to decide what’s important. You choose the things that are important to you. You can prioritize ways to use money so that it’s meaningful. Where we are spending (or saving) our money is a good indication of where our heart is. Luke 12:34 reminds us “For where your treasure is, there will your heart be also.”
So, is your bank statement showing your heart to be in materials things, or in God’s hands? You can decide. You just need a budget to make a plan and make it happen.