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There are so many advantages to budgeting!
And truly the hardest part is starting. Followed my maintaining your budget system.
We all know that we “should” budget.
Also, overcoming your past hurdles with budgeting, like this one…
Back when we were newlyweds and combining finances, we tried to work out a budget. Over and over again. Nothing seemed to work. We were trying to fit all of our expenses (the box) into our income (the circle). And the box doesn’t fit into the circle. No matter how you try and get it to fit.
The main reason why it didn’t work is we didn’t look at budgeting from the big picture, what we wanted to do in life and how to get there with money.
A budget shouldn’t be looked at as constricting. It should be seen as a path to financial freedom.
While it took us some time to nail down a budget, yet the advantages of budgeting outweigh any other disadvantages or nay-sayers.
For us, it was the decision to pay off debt, which helped catapult us to finally sticking to a budget. Thus, coming to fully understand the true advantages of budgeting. Guess how much we paid off?? Read about our reason to pay off debt.
Now, it is our life’s visions that keep up consistent with budgeting because the benefits of budgeting are too great.
Are you “budgeting” or are you really “budgeting”?
So, if you are struggling with a budget, keep reading to fully understand the full advantages of a budget.
#7 may save your marriage.
Oh, and don’t let the disadvantages of budgeting hold you back. Learn how to spot them and not have them fool you again.
What are the Advantages of Budgeting?
There are many reasons for budgeting.
However, there are some top 3 benefits of budgeting you need to know. These are the overarching outcomes that will change your personal finances forever.
If you want to make sure you are living below your income and stay on track with money journey, then use this list as motivation.
1. Stay Focused on Money Visions
Money Bliss is built upon creating a strong money foundation and reaching your life’s visions.
In order to do that, living within your means is necessary.
Truly, I believe that you want to do the best you can managing money and are eager to learn how to reach financial freedom. Plus enjoy what has been given to you as well as bless others.
All of that starts be asking the question, “What am I called to do in life?” and “How does money fit into that equation?”
By having a budget, it helps you stay focused on your money goals.
Without a budget, you are standing there hopelessly living paycheck to paycheck while being straddled by debt.
This is the biggest advantages of budgeting. Period.
2. Improve your Money Situation
The next advantage of budgeting is to improve your money situation. Get ahead with your personal finances.
While sometimes it isn’t glamorous to live with a budget, by successfully staying within budget, it will change your bank accounts.
For us, we wanted to pay off debt and have $500 per month of cash flow to go towards something else. By sticking to our budget and spending plan, we paid off our debt and greatly improved our money situation. Plus living debt free is awesome!
Honestly, most people don’t have a clue about the true purpose of budget and why a budget is needed.
What is your reason to budget?
How will a budget improve your money situation? What actionable steps are you willing to take to improve your money situation?
Ready to learn how to budget money?
3. Manage Money your Way
Being a slave to debt or to a job is no fun.
However, that is the number one reason people go to work – to pay the bills.
An advantage of budgeting is you can start managing your money how you want to. However, the first couple of months are going to be the hardest since you are changing habits to manage your money in a different way.
That different way is you managing your spending. Not letting your spending manage your money.
It is role reversal.
In the end, it is for the good.
4. Save for a Goal
One of the biggest benefits of budgeting is paying yourself first. This is also known as backwards budgeting.
By paying yourself first, there is money set aside for a vacation, for a new-to-you car, for retirement or an emergency fund.
To be honest, in my 20s, I didn’t pay myself first. I always saved what was left over at the end of the month. And guess what? Hardly any progress was made.
For example… if you want to buy a new TV, then payoff other debt first, save up and pay for cash.
Using cash is a huge advantage of budgeting.
What goals do you want to start saving for today? Leave a comment below and let us know!
Using the 100 envelope challenge is a great way to start saving money.
5. Control Impulse Spending
In today’s society, it is so easy to pick up an item here or there for just pennies.
Impulse spending can wreck your finances.
One perfect example happened when my son was little. We were at the grocery store; he was begging me to buy a $1 matchbox car. Seems simple enough. It is only a dollar, right?
That is what another lady was trying to convince me. However, that $1 times 52 trips to the grocery store times multiple children.
Impulse spending starts to add up fast!!
To truly understand your weaknesses for impulse spending, try a spending freeze. That is the fastest way to realize how easy impulse shopping adds up. Plus it is a great way to kickoff starting a budget and minimizing expenses.
Related resources to help you:
- The Vicious Cycle- Learn How to Stop Spending Money Now
- Powerful Millionaire Habits that will Change Your Life
- Need a Spending Freeze this Year?
6. What Truly Matters in Life
By sticking to a budget, you are able to understand what truly matters to you in live and what doesn’t matter.
There is no better way to understand your spending habits than to start a budget.
Then, you can get to the nitty gritty of what really matters to you.
Combining impulse spending with what truly matters underlies the important advantage to budgeting.
In the day to day, it is hard to step back from our materialistic society. But, if you ask anyone with days left to live, they want relationships over a shopping mall.
What truly matters to you in life?
7. Stop Fighting Over Money
Nine times out of ten lack of communication is the primary issue. Talking about a budget with a significant other, spouse, or accountability partner can be a little intense (to put it mildly).
You don’t like how he spends money. He doesn’t like how you spend money. The story can go on and on.
To be honest, you’re not going to agree on every single budget line item.
So, don’t even try.
Compromises will have to be made.
First and foremost, make sure your basic expenses are handled first. Then, you can work through the rest of the budget.
For areas in which you cannot agree, then agree to a certain dollar amount of slush money and move on.
Stop fighting on the small stuff and start winning on the big picture. Get a full understanding on how slush money works.
Must Read: How to Talk about Money with your Spouse
8. Prioritize your Spending
This is probably the most obvious benefits of a personal budget.
Have you compared your actual spending to where you want your spending to go?
Most people haven’t. So, don’t stress.
But, when you do, don’t be surprised to see your spending going towards random things and not your big picture. This is a common case of keeping up with the Joneses’ or just blindly spending money.
Where do you want to focus your spending?
Related Resource: Avoid the Trap of Lifestyle Creep and Reach Financial Freedom
9. Reach your Goals Faster
With budgeting, you see where your money is going and how you are spending it. That is the primary reason for a budget, right?
The great benefit of budgeting is that clarification on where your money is spent helps to reach your goals faster.
Whatever your goal – you will reach it faster when you stick to a budget that works for you.
Do you know how to make a money goal? If not, learn the truth about money goals.
This one is an advantage to budgeting; however, don’t get caught in the comparison trap. Whether this person paid off $100K of debt in 6 months or bought a new car or went on a fancy vacation.
Bonus Tip –
At your next monthly huddle, discuss how these advantages of budgeting are changing your money situation. If you haven’t made a budget, then what benefits of budgeting do you want to see?
Related resource for you: How to Make a Budget in 7 Simple Steps
Disadvantages of Budgeting:
While the advantages of a budget heavily outweigh the disadvantages of budgeting, it is important to understand both sides of the coin.
Many times, it is super easy to overcome all of these disadvantages of budgeting by being aware of the typical issues.
Let’s discuss what are the disadvantages of not budgeting.
1. Give UP
The biggest disadvantage of budgeting is people tend to give up too quickly.
Let’s face it. Budgeting has a bad rap. It’s not because of actually budgeting, but because so many people have given up on the budgeting process.
The first three months of budgeting are always the hardest.
New habits are being developed while old habits need to be tossed out the window.
Also, in the first few months, a budget will need to reassessed and tweaked where necessary. This isn’t the time to give up.
Remember back to your money visions – are you willing to give up on those? If not, then stick to your budget.
2. Takes Time to See Progress
Since life moves at a super-fast pace, everyone expects to make significant progress overnight.
Don’t get a crazy hair-brained idea that overnight your net worth will skyrocket by $100,000.
When budgeting, it will take time to see progress.
Especially if you are paying off debt, the process seems like forever. Been there. Done that.
Grab one of our money goal tracker in the FREE resource library. This free printable will help with motivation.
Also, try a spending freeze for a day, a week, or month. That is one way to jumpstart controlling spending.
3. Hills & Valleys
Along your money journey, there will be ups and downs on staying on budget.
This is completely normal. So, no freaking out!
Give yourself grace that not every single day will you be perfect with money and your budget.
One of my personal favorite tricks to eliminating the roller coaster effect is to use slush money.
You have to learn to overcome when ends don’t meet.
4. Miss Out on Life
This disadvantage of budgeting only applies to some of us. But, enough people to mention it.
In an effort to stick to a strict budget, these type of people watch from the sidelines on the game called life.
Here at Money Bliss, we want you to learn how to enjoy money while living life to the fullest. That is why we built our foundation on the Money Bliss Steps to Financial Freedom.
Steps to successfully walk you through your money journey.
All of the Benefits Add Up
All in all, the advantages of budget greatly outweigh not budgeting.
The key is to find a method of budgeting that works for you and your household.
Don’t get caught in the trap that budgeting won’t work for your situation. It will work.
Most people give up and say it doesn’t work because it is too hard to live within the means. That isn’t the budget’s fault.
Now, that you learned the advantages of budgeting plus a few disadvantages. It is time to learn how to make a budget.
Do you truly understand how a budget can impact your life forever?
If so, go here and learn how to budget money. Reap the benefits of budgeting!
More Budgeting Resources
- With the Right Money Mindset, Go from Broke to Rich
- How to Make Living on a Budget Painless
- The Vicious Cycle- Learn How to Stop Spending Money Now
- 8 Crazy Simple Tips when Budgeting for Christmas Shopping