The Five Unexpected Benefits of Budgeting
We all know that we should have a budget. There have been an astounding amount of books, podcasts, blog posts and general commentary suggesting having a budget helps you save money and work towards your goals.
But despite this, very few people have an actual documented budget. In this article I’ll explain the top five unexpected benefits of budgeting which may just change your mind.
Benefit 1: A good budget should encourage you to spend on things you love
Too often budgeting advice focusses on restricting spending. A good budget shouldn’t be about restriction but instead, should focus on directing your limited money to the things that bring you the most joy.
By going through the process of budgeting, you can make active choices about what is more important to you and direct money to these areas.
If you love coffee, make sure you direct money to your budget for this. If you enjoy buying clothes, work that into your budget. A budget means that not only will you have the money set aside, you’ll feel guilt free when you do spend the money.
Benefit 2: You get to go on more holidays
In our experience, people who have a budget tend to go on more holidays. Why? Because they put the money aside for it. That means each year, they have a lump sum of money and say ‘where should we go this year?’.
The ones that don’t budget tend to wait years in between holidays and still struggle to get there when they decide to go.
Benefit 3: Your relationship will improve
I think it’s fair to say that money may be the single greatest issue that couples fight about. Money touches every area of our lives and the constant struggle of managing our money as a couple can add a lot of stress to a relationship.
The process of coming up with a budget can be a good time to discuss goals and values with your partner in a less stressful situation. Instead of waiting until somebody has made a purchasing decision the other person doesn’t agree with, you get to have the conversations upfront about what is agreed upon and what isn’t.
This doesn’t mean you won’t fight if one of the couple doesn’t stick to the agreed budget, but it can take a lot of the pressure off.
Benefit 4: Budgets can encourage you to think creatively (which can be more fun)
Sometimes restricting how much you can spend can force you to become more creative and in turn, have more fun.
For example, if you would normally go to dinner with a friend but the budget doesn’t allow it, you may come up with other creative ways of catching up. Maybe you go for a walk or a hike? Maybe you visit a farmer’s market?
Sometimes a bit of restriction can help us to break the patterns of life and look for new and fun ways of doing things. Whilst this can take a bit more effort, the rewarding feeling of knowing you kept to your budget and had a great time can really improve the whole process.
Benefit 5: Budgets allow you to ‘gamify’ your money
There are a number of budgeting apps which can help you stick to your budget. The benefit of these (or a well laid out excel spreadsheet), is you can turn your budgeting into a game.
The rewarding feeling of seeing your savings rising or your debts being paid off can create a sense of control and achievement which can help in other areas of your life.
So there you have it, my five unexpected benefits of budgeting. If you find yourself wanting to set up a budget but struggling to understand how to fit it into your life or tailor it to you, feel free to reach out. As part of any financial plan, we formulate an exact budget for you and set you up with structures so we can help you manage it.
This post is from our resident Financial Planner Cara Brett, check out her details in the About Us section.
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