Many people search high and low for complex solutions that will allow them to finally take control of their finances. But, in reality the first and most important step might be the easiest and that’s budgeting your money.
Did you know that the average budgeter can save $600 in their first 2 months of budgeting? And this only gets better over time because that figure jumps to over $6,000 for the first year alone.
Budgeting, whether you do it manually or with one of the popular budgeting apps on the market, enables you to clearly see where your money is going so when you realize that your paying for Netflix, Hulu, and cable, you can eliminate some of these expenses saving you hundreds of dollars that can be put to much better use.
10 Amazing Benefits of Budgeting
Even if you're new to budgeting, be sure to stick around until the end to see the 10 ways budgeting will benefit your life forever. You will also find what the best budgeting apps are so you don't have to write down all of your expenses which can waste a lot of time.
1. Start a Business with the Money You Save
The money saved from budgeting can be used to start a company and help you to become your own boss. Using these funds for your clever business idea has the potential to grow your finances a lot more than the typical 9 - 5 job.
But, as with every company there are start up expenses you must take into consideration. Making it a habit to budget your money for a year or two can enable you to set aside that extra 5 - 10 thousand dollars needed to start that business you've always dreamed of.
2. More Money for Vacations
By eliminating all those unnecessary expenses and properly setting money aside, you will find that you have enough left over to take at least one awesome vacation each year. Now you may be thinking “how can a vacation help me grow my finances?.”
Well, taking at least one vacation each year will help you to come back energized and ready to take on the world.
Seeing different parts of the world will also motivate you to make the needed financial changes in order to afford doing more of the things you truly love.
3. Build Up a Nest Egg
It's recommended that you always have at least 3 - 6 months of your monthly expenses saved for a rainy day. This money allows you to not be as anxious if you fall on hard times and it gives you breathing room to find a new and better source of income.
The truth is, that it takes money to make money, and having your nest egg of cash sitting there for when you need it the most will make it easier to pursue your financial goals whenever the opportunity presents itself.
4. Reach Your Financial Goals
Before tracking your monthly expenses, you may have found it extremely difficult to reach savings goals that you've set for yourself.
This can be anything from saving up money for a down payment on a home, or preparing for that dream wedding with the person you love the most.
When you know exactly how much money you have coming in and going out each month, you can literally track your savings schedule, making it easier to grow your money in a predictable time frame.
This type of financial responsibility is vital for anyone who decides to take full control of their money.
5. Begin Investing
With the extra money you’ll save after becoming an expert budgeter, you now have the extra funds each month to invest, whether it's in the stock market, or by investing in yourself through starting a business.
A huge problem is that the average American has less than one month of their income saved and it's extremely difficult to grow money that was never there in the first place.
With the extra cash that comes from budgeting, you can learn about long term investment strategies that can set you up for the future.
Check out a few highly recommended investment platforms included in our investing section. Investment platforms like Robinhood and Webull even offer free stocks for signing up with no minimum balance.
6. Avoid Debt
A person who doesn't budget may quickly find themselves low on funds which may result in them taking out additional loans to pay for monthly expenses. This cycle can easily turn into a snowball effect keeping you in a constant cycle of debt that is hard to get out of.
By budgeting and tracking your expenses, you are far less likely to turn to borrowing money, but instead you can focus on growing your money.
The only type of borrowing we encourage is when it comes to business loans and even then, you should already have the cash set aside to pay off those debts when necessary.
7. Become a Personal Finance Resource
And by that, we don't mean that you're going to start handing out free money to all of your friends. But you will become a resource on financial education that many will turn to for advice.
This can include those in your own family or even your fellow co workers as more and more people strive to imitate your great example when it comes to budgeting and how you handle your personal finances.
This new found reputation could even lead to future promotions as your workplace will easily begin to trust you with weightier matters.
Who knew that becoming an expert budgeter could lead to being more respected in your day to day life?
8. Less Stress
Financial problems are among the leading causes for stress in America alone. Without a proper budget, you may never truly know where your bank account will stand at the end of the month, and this can lead to added stress and anxiety.
With the added peace of mind that comes from budgeting and saving money, you will actually become a healthier person. Stress is a major cause for high blood pressure and can even lead to heart attacks.
Budgeting your money will without a doubt make you a happier person now, and for years to come.
9. Budgeting Keeps You Honest
By keeping track of your spending, you can be real with yourself and truly know if you can afford that shiny new 60 inch flat screen TV, or that brand new BMW that will no doubt come with a hefty monthly payment.
Without keeping a solid budget, it is much easier to buy things on impulse. This is because you may be asking yourself if you can really afford to spend a certain amount of money and since you don't track your expenses, you may falsely reason with yourself that this purchase makes sense, when in reality it doesn't.
Budgeting helps you to clearly know if you can afford a new purchase or not without any shadow of a doubt.
10. Improve Your Credit
Now that you have eliminated many unnecessary expenses that budgeting has helped you to discover, you can now focus your efforts on paying off credit cards and other debts on time and improving your credit score as you do so.
Having complete control over your money means that you are much less likely to make late payments or miss a payment all together.
Budgeting can take a person who was previously irresponsible with their money and make them a part of the 800 credit score club, which puts you in a great position for low interest rates when purchasing a car or a new home.
Now that we’ve made it to the end of our list, here’s a few helpful tips to use your time wisely when starting out on your budgeting journey.
As we know, there's an app for everything, so we’ve listed some of the best budgeting apps on the market below so you don't have to spend hours tracking your expenses by hand.
Best Budgeting Apps
Time is money, so we’ve done the work for you to help you find the best possible set-it and forget it budgeting solution for your needs. You can also check out our budgeting section for more awesome resources.
We look forward to continuously growing this community of like minded goal seekers and showing you how to make your money work for you!
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