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The Benefits of Creating a Household Budget - R. Darren Sanford, CPA, CGMA
Sep 222011
 
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Creating a household budget can be a scary thought for most people. A lot of people look at a household budget as something that will restrict them from doing things. In reality, a budget is actually a tool that you will use to help guide you financially so you are able to buy and do the things that are important to you in your life. One of the best personal finance tips you can employ today would be to create a household budget. Take a look at the following benefits to creating a household budget.

1. Take control of your money- First and foremost, having a household budget lets you finally take control of your money once and for all. When you see how much money you have going in and how much money you have going out, you will be able to make better financial decisions. Instead of stressing over how you will bring more money in, what if you could cut back on your expenses? Having a budget let’s you see what you are spending your money on so you are able to make better choices.

2. Create a financial plan- No one wants to work forever. A budget will let you start to create a financial plan so you can make sure to reach your future financial goals. We work an average of 35-40 years of our life, so why not make our money work for us, instead of spending it all on things we end up tossing away later?

3. Stress less – When you know where your money is going each month, you will stress less over money (or the lack of it). Once you get a firm understanding of your financial situation and start to make some changes, you will stress less over money each month. Your situation still may not be perfect, but you can get yourself on the road to personal finance recovery quickly by following a monthly budget.

4. Live within your means- One of my favorite quotes is “A budget tells us what we can afford, but doesn’t stop us from buying it”. And that’s just the thing about budgets, if we don’t follow them, they don’t work! Once you see what you can afford each month, you will begin to live within your means to make your budget work.  This isn’t always a negative thing either. Sometimes cutting things out can make life much simpler and less hectic which in turn can make you happier!

5. Find out what’s important- When you see what you have coming in and going out each month, you may start to notice that some things just aren’t important anymore. Is it worth having to stress about where the money will come from when you decide what your stressing over isn’t worth it? It’s doubtful. Once you start to understand your spending you will realize that some things just aren’t that important.
Understand that creating a household budget may take time. But once you get started, you will start to see the ways your financial situation improves. There are many reasons to create a household budget. If you haven’t done so, what are you waiting for? Get started today!

Disclosure of Material Connection: Some of the links on this blog are “affiliate links.” This means if you click on the link and purchase the item, I might receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

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