Ah, the budget. It is a word we are all too familiar with but something none of us are too eager to do. I know when my father used to talk to me about making a budget I was all too anxious to change the subject. Why do I need to have a budget I would think to myself. I’m doing just fine.
That was all before I moved out and lived on my own. Now that I have a steady stream of bills to pay and a limited income, I understand why having a budget is important. So first, what is a budget? A simple definition of a budget is living within your financial limits. Your expenses should not be greater than your income. In a world where too many people are living off credit and getting themselves into debt, budgeting is essential to maintaining financial security.
Benefits of Budgeting
- Budgeting will help you reach your financial goals
- Budgeting will eliminate debt.
- You will know when your bills are due
- Your savings will increase
- You will become aware of your spending habits
- Helps you become organized
Of course, there are many more benefits to having a personal budget set up than what I listed there. The list could be endless — the important point is creating and maintaining a budget is an important part of personal finance.