If you've heard it once, you've heard it a thousand times: BUDGET YOUR MONEY! Financial experts and money advisors have been shouting this mantra from the mountaintops for years.
This is just one of those financial lessons that cannot be preached enough. If you and your family want financial security, following a budget is the only answer.
Still not convinced? Below are six good reasons why everyone should create and stick to a budget.
1. It Helps You Keep Your Eye on the Prize
A budget helps you figure out your long-term goals and work towards them. If you just drift aimlessly through life, tossing your money at every pretty, shiny object that happens to catch your eye, how will you ever save up enough money to buy a car, take that trip to Aruba, or put a down payment on a house?
A budget forces you to map out your goals, save your money, keep track of your progress, and make your dreams a reality. OK, so it may hurt when you realize that brand new Xbox game or the gorgeous cashmere sweater in the store window doesn't fit into your budget. But when you remind yourself that you're saving up for a new house, it will be much easier to turn around and walk out of the store empty-handed.
2. It Ensures You Don't Spend Money That You Don't Have
Far too many consumers spend money they don't have—and we can owe it all to credit cards. As a matter of fact, the median credit card debt per household reached $2,300 in June 2019, according to a recent study from ValuePenguin.
Before the age of plastic, people tended to know if they were living within their means. At the end of the month, if they had enough money left to pay the bills and sock some away in savings, they were on track. These days, people who overuse and abuse credit cards don't always realize they're overspending until they're drowning in debt.
However, if you create and stick to a budget, you'll never find yourself in this precarious position. You'll know exactly how much money you earn, how much you can afford to spend each month and how much you need to save. Sure, crunching numbers and keeping track of a budget isn't nearly as much fun as going on a shameless shopping spree. But look at it this way: when your spend-happy friends are making an appointment with a debt counselor this time next year, you'll be jetting off for that European adventure you've been saving for—or better yet, moving into your new home.