Do you often wonder how other people who earn a similar salary to you are
able to make ends meet? Perhaps one could argue that they are able to do
this because they have fewer expenses or earn an additional income from
other avenues. But the truth is, that if you were to ask around, most of these
individuals would say that they live by a stringent budget, day in, and day out.
Living on a budget is many things, but it isn’t easy. That is why so many of us
struggle with it. However, the rewards one can gain from it outweigh its
Here are the top five rewards you can reap from living on a budget:
1. With a budget you don’t guess, you know
If you have to ask yourself whether you can afford something or not, you
probably can’t. A budget’s main purpose is to prevent irrational purchases and
help you pay for the things you really need. There is no point in living lavishly
one week of the month and scraping by the rest of the time.
2. With a budget you can save for tomorrow
Do you want to take an overseas trip, send your children to college and retire
without any financial complications? Well, if you don’t budget and plan for it
early in life, all your short- and long-term goals will only stay dreams. A budget
helps you save for the goals you know you want to achieve but also helps you
save for the unforeseen, unexpected things life might throw your way.
3. With a budget you have less stress and more control
Many an argument or sleepless night has been the result of financial
concerns. Why? Because when we don’t have control over our finances we
start to worry and stress. It makes us edgy and can have a negative effect on
our relationships. With a budget however, you have a plan and you can take
back control of your finances one step at a time.
4. With a budget you are forced to take your money seriously
Instead of focusing on how much money you wish you had, a budget let’s you
focus on the money you do have. It forces you to take every cent you earn
seriously by re-evaluating what you spend it on and asking yourself whether
you really need this or that.
5. With a budget you won’t spend what you don’t have
What do you normally do when you have used up your salary several days
before payday? Do you use money from your overdraft? Or swipe your credit
card? Overspending is a vicious circle that repeats itself month after month
and that is why living within your means, by setting up a budget and following
it, is an essential part of becoming debt free.
Next time we will show you how to set-up a personal budget.