Why you should have a budget

If you thought that budgeting was only knowing how much income and expenses you had each month, you are wrong. It goes beyond the money flow and it allows you to organize several aspects of personal finances. A budget will wake you up about your capital and how you use it after your monthly expenses.

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It’s not only the foundation to manage your finances but there are also other reasons for -perhaps you haven’t considered- taking the time to budget. In the beginning, it might seem a tedious job, even discouraging when you see that numbers aren’t good enough. However, once you have the habit, you won’t be able to understand why you spent that much time without budgeting.

Learning your consumption habits

Not only yours but your family’s too. When you record your expenses, you will be able to see how the money is moving, in which areas are the most spendings. In addition, you can see how often you consume a service or a good.

Identify where are you spending too much

A budget allows you to see how you allocate your money each month and correct some of your consumption habits that might be affecting you or that you should be more careful about. Maybe you believe that you aren’t a big spender but once you see it on your budget, you will see the truth.

Saving money

When identifying all the excessive spendings and consumption habits, you will be able to change your behavior to use money with intention. More often than not, emotions play a key role when acquiring goods but we don’t take into account if they actually provide a genuine value to our lives. That’s when saving money comes more complicated but if you have a budget that you must stick to, most likely you will think twice before buying something.

Achieving financial goals

Since budgeting allows you to save money, it is also very useful to establish goals to buy more expensive goods that can take a lot of time. To achieve this, you must adjust your budget so you can cover your monthly expenses but also have spare money -maybe through adjusting in some other areas- to build a fund so you can reach that financial goal that you have set for yourself.

Avoid fraud

If you don’t know how your money is moving, you probably don’t even realize that you have become a victim of some kind of fraud. You must know how much money does the bank charge you for insurances for card protection, each transfer, and each purchase you do. Having a budget is the best way to avoid that someone takes advantage of your earning.

Every person who has taken the time to learn about personal finance will highlight that a budget is the starting point for everything. If you add these reasons, there aren’t excuses to have one!

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