Three Reasons to Start Budgeting
Gabrielle Dolenga
| 2 min read
According to the American Psychology Association, 64 percent of Americans are moderately to extremely stressed about money.
The majority of this stress comes from a lack of clarity, confidence and control regarding their finances. Experts suggest that one of the simplest ways to alleviate financial fear is to set and stick to a budget. Although budgeting may seem like a tedious or penny-pinching process, it actually has many life-enhancing benefits.
- You become aware of what is going on with your money. Budgeting makes it very clear to see the money you have coming in, how fast it goes out and where it is going to. A budget makes logging into your banking app or receiving your monthly statement less stressful, as you don’t have to wonder where your money went. Knowing what you can afford helps you take advantage of buying and investing opportunities and lowers your debt.
- You will eliminate unnecessary spending. Do you still subscribe to a magazine that you never read? Do you pay for Pandora but find yourself using Spotify on a regular basis? Many of these small, unnecessary purchases may be revealed through your budget. They may not seem like much when you’re reviewing your monthly statement, but eliminating wasteful spending can increase your long-term savings.
- You can take care of your future self. It’s hard to believe that the financial decisions you make today can affect your future. Unnecessary spending can leave you with a lack of funding for large purchases or emergencies. Budgeting allows you to be intentional in the way that you spend and save money. It helps you decide if you want to sacrifice short-term spending, like purchasing small luxuries such as coffee every day, in exchange for a long-term investment such as a beach vacation or new appliance.
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