“A budget is telling your money where to go, instead of wondering where it went.”
~ Dave Ramsey
The cost of living is rising. This increase in prices has left many South Africans scrambling for better ways to make money, cheaper places to purchase essentials as well as a headspace where they are seriously contemplating change.
Financial change is now more important than ever before. Income is not rising at the rate at which our cost of living is, and we still need to make ends meet. Budgeting is no longer a question; it is an imperative financial decision which needs to happen sooner than later. If you are still questioning whether or not, you should be keeping a budget then this article is for you.
Reason #1 – Knowledge is Power
Knowledge is power, and knowledge over your money is the most powerful advantage that you can have. To understand your finances and see them in front of your eyes gives you the ultimate control over the month, year and perhaps even the next five years. You would not allow your home to run itself, or your children to govern themselves from toddler to adulthood, you would not even allow your career to run itself, then why allow your money to run itself?
It’s important to understand that without a budget, you are relying on your memory, your state of mind and life to happen to your finances.
This is no control at all.
For example, you forget a large payment needs to be made. Instead, you buy an expensive birthday present for a loved one. On a random Tuesday morning, sitting at work, you remember you have this massive payment, and no money left to pay it. Now your day turns into an absolute nightmare.
By not using the tools available to control the finances, you have rendered yourself powerless. Budgeting prevents this, and gives you back your power.
Reason #2 – Tomorrow Becomes Less Daunting
Not all budgets look the same. Many people are over-indebted and a budget seems like an unnecessary thing. This could not be further from the truth. The moment that you begin putting finances to paper, you will be able to start sorting finances out and working towards tomorrow. You are able to make those difficult decisions and your financial situation will be able to improve.
Of course, there are free tools to be able to calculate how much money you spend and where. Tools such as our online calculator can assist you right now. The more clarity you have around your finances the more empowered you will feel, and the brighter tomorrow will look.
Reason #3 – Less Stress more Acknowledgement
Budgeting means that you can see what your financial position is at all times. You are aware of your limitations and can therefore become confident in what you are able to afford and what you are not able to afford. Budgeting also means that you are able to confidently tell others around you that you cannot afford to assist them.This decision will not carry guilt because you are completely aware of the fact that your budget says ‘no’.
Another pertinent point under acknowledgement of what your budget allows and what it does not allow, is the fact of salespeople. Everywhere you look people are selling something and hoping that you buy into their product. When you budget you can, again, confidently decline this and with a mental image of your budget in your mind, you will not be swayed into buying what you really cannot afford.
Reason #4 – Saving becomes a Reality
When you do not have a budget in place, you are not able to save as much as you could. You will also find yourself dipping in and out of the savings pot over and over to pay expenses which you forgot about or expenses that arise. This is why an emergency fund is so important. In your budget you are able to set money aside for these emergencies as well as accurately determine how much money per month you can set aside for savings. You control your money and your ability to save will do wonders for your mental state as well.
Reason #5 – Shifting Priorities
There is an exceptional power in having money saved, having control over your money and shifting your priorities. Your confidence increases, your sense of wellbeing increases and your overall state of being changes completely. When you live month to month, without any knowledge over your financial position, you are unknowingly stressing yourself out all the time. You begin causing a subconscious blockage to finances which is another rollercoaster altogether.
It is important to start somewhere. Budgeting is the first logical permanent step that will change your life in more ways than simply having control over your money. It will benefit you beyond what you can fathom, and once you are on the road to success with control over your finances, there is only one way to go, and that is up. Try budgeting for six months and see the difference. You will never look back. If you would like to watch a video on budgeting, visit our Money Moves with Debt Rescue YouTube Channel here.
In times where financial stress is a more frequent topic than we understand, remember that there is a legal method to find financial relief now. Simply fill in an obligation-free quote and see how much you can reduce your monthly debt repayments now.