When was the last time you updated your personal budget? Sorry — we said the dreaded “b” word. Even though everyone knows the benefits of the budget deep-down (some of us deeper than others), many of us don’t know how to budget, or at least how to budget in a way that sticks.
Frequently asked questions
You do not absolutely need to have a budget—or at least, it’s not illegal not to have one. However, if you are somebody that is dedicated to reaching or maintaining financial stability, you will find it considerably harder to do so without a budget.
Not only does a budget help you take the reins on your finances and feel more in control, but it also helps you save money by avoiding overspending. It also helps you to notice patterns in your spending and course-correct where necessary.
Whether or not you use a basic budgeting method such as a notebook or spreadsheet or a type of budgeting software is up to you and ultimately a personal preference.
The point of a budget is to find something that you are committed to and can maintain regularly, so it’s important to choose whatever feels right to you.
This is ultimately a personal decision, as each method will come with its pros and cons.
A budget is an organization of your or your household’s income that lays out spending considerations for expenses, debt payment, and savings.
The main purpose of a budget is to save you from financial distress by ensuring that you do not overspend. It can also be used to proactively save up for a purchase or vacation or to pay off debt since it allows you to factor in these goals while also accounting for your everyday expenses. A budget is also a powerful way to bring yourself peace of mind.