Why You Should Have a Budget

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Most people have heard that they should have a budget if they’re going to manage their money wisely. But, knowing WHAT to do is entirely separate from knowing HOW to do it or even WHY to do it. To be a successful adult, I think we need to know all three. Today Mandi at Organizing Your Way is sharing HOW to create a budget. If you have never created a budget, there’s no better time than the present for you to start. This is a new month, so today is a great day to get one going.

Three years ago, our family did not regularly budget. In fact, we just spent money until the money was gone and then some. Needless to say, it got us in a bit of trouble. We didn’t file backruptcy or get foreclosed on, but one day we woke up and found that we had a lot of debt without a lot to show for it. FishPapa and I tightened the belt and worked hard to get our affairs in order. It took us about 18 months to pay off $18,000 in consumer debt, but we did it. Today we’re debt-free except for a rental property we own in Kansas City.

One of the best tools at our disposal was learning to budget. If budgeting is a new practice for you, you may be wondering,

Why Should I Budget?

There are probably many answers to this question, but from my experience, here are three important reasons for having a budget.

  1. You will know where your money is going. Often times, people spend their hard-earned money and then wonder where it went. If you decide at the beginning of the month where to spend your money, you won’t wonder where it went because you told it where to go.
  2. You will control overspending. A good budget accounts for every penny in the kitty. If you’ve already decided where to spend your money, then all your pennies will be spoken for and can’t find their way to Stuff Mart without your permission. If you have a budget and stick to it, you won’t spend more than you have or spend it on things that you shouldn’t.
  3. You will have peace. If you’re trying to watch your pennies, then you probably feel guilty when you spend money, second guessing the purchase or feeling bad afterward. I’m often plagued by this. But, when purchases are planned and budgeted, you will have freedom to make those purchases because they were already planned. Additionally, if you are married and prepare your budget jointly with your spouse, you will have a wonderful opportunity to discuss expenditures together. If you’re both committed to sticking to the budget, your spouse can’t come home with a bass boat or a $500 dress that causes you to hit the ceiling.

A budget will not only help you financially, but it can also contribute to peace in your heart and peace in your relationships.

So, what do you do? Do you budget? Why or why not?

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  1. Absolutely! Every year it's harder to put money into savings and easier to spend it on 'necessary' items that aren't necessary. Without a budget we would continue to slide further away from our goals of savings and giving. As Christians we believe budgets are a tool to help us manage our money the way God expects us to.

  2. I can't imagine how people on a modest budget get by without budgeting now, but apparently we did! If we didn't write our budget and spend every paycheck on paper before the month begins we'd never make it. Using cash for everything you can is a good tool for helping you stay within that budget too!

  3. We started doing a budget about 4 months ago when we went through Dave Ramsey's Financial Peace University….it has been life changing! Now we know where every penny goes and have stuck to our budget 🙂 We are on our way to paying off all our debt and it's amazing! Budgets are definitely the way to start getting your financial life in check.

  4. Hey Jessica,
    Just getting back into blogging after a while of NOT. Wanted to say hi. Your blog has really taken off. Way to go.
    I'm taking the January pantry challenge too. Should be fun.
    alicia osborne

  5. I love the planning part of a budget — it's sticking to it that I'm not so great at. But after watching my sister literally have to count every single penny, my husband and I have recommitted to sticking to our budget. We went through it together, saw where we could save more, and we have a goal we're working toward to help us stay motivated. 🙂

  6. I have a budget for bills – household – as well as food, gas, school lunches, etc. What I don't do is account for EVERY penny.

    I find that the months I stick with my budget more closely, I have a sense of peace – even if I'm broke – at least I know it!

  7. Our family has been making a budget since taking Dave Ramsey's Financial Peace University. We don't always stick to it 100% but we do sit down and go back over the previous budget to discuss areas of improvement. It's been great, and my husband and I enjoy making the budget together. This year we will be tracking where the money goes better than in 2009.

  8. We did a budget and we are already over on our grocery bill. Luckily, this is our restocking time and we should be able to come back down by the end of the month but, it was discouraging:-(

  9. I like numbers, but having a detailed budget was too constricting for me.

    Instead I made a master list of all the bills and figured out the "extra" amount. Like $200 and that's what we had for misc. things rather than saying $50 for out to eat $30 for gifts etc.

    We also have an easily accessible savings if we need to go over and a separate emergency fund.

    We NEVER carry a balance on credit cards but we do use them.

    Peace over finances is worth the extra planning!

    Did you really post this at 1:44am? You are as bad as me:)

    I've been following you for awhile but I've decided to get more involved by commenting.

  10. We absolutely have a budget and I am so glad! We are able to save and to give FAR more than we would/could without it. I love the FREEDOM that budgeting gives to our family!

  11. You're absolutely right. Knowing why we do things is vital. It's central for my follow through on anything. Why stay at home? Why write? Why blog? Why read the Bible? Why pray? Why budget? Why save money?

    Once I've got a strong 'why', we're off to the races!

  12. I know I need to budget, and I guess I'm slowly getting there, but as a single parent it's very difficult to stick to one because there is no accountability and/or encouragement with anyone. It's just me, and it's discouraging. Our church is looking at doing FPU, and I'm hoping we do. It's hard to find someone to trust as an accountability partner with your finances, and it's just easier to "wing it."