When it comes to your finances, making a budget is one of the best ways to manage your money, but unfortunately, a lot of people are reluctant to actually make one.
While you may associate budgeting with financial restrictions, it can actually help you save money, instead of overspending and can allow you to make the most of every penny.
In this post, we’ll be exploring this subject and the reasons why budgeting is important for your bank account and your peace of mind!
A budget will help you prioritise your spending. With a budget, you can focus your money on the things that are most important to you. That could be reducing your debt, saving for a home or starting your own business. But whatever your reasons, a budget will help you create a plan and track your spending so you can reach your goals.
Too many people end up spending money they don’t have - with most people having some form of debt. However, if you create and stick to a budget, you won’t have to worry about getting into debt. You’ll know how much money you earn, how much you can afford to spend and how much you can potentially save. Keeping you within your spending limits and debt-free.
Creating a budget will make you take a closer look at your spending habits - you may notice that you’re spending money on things you don’t need. Having a budget will enable you to rethink your general spending habits and focus on your financial goals.
Life is full of unexpected surprises, like car issues, broken boilers or even bills - so it’s a good idea to have an emergency fund. You should add emergency fund savings into your budget so you are prepared for anything life may throw at you.
Sticking to a personal budget will stop you from becoming overwhelmed with your financial situation. If you strictly follow your budget you’ll prevent overspending, you’ll be prepared for any emergencies (like those above) and you’ll reach your financial goals a lot faster. This can also make you personally feel more secure and at ease.
If you would like more information on budgeting you can also contact our Money and Budgeting Service. The MABS teamwork in partnership with Housing Leeds, specifically helping tenants who are struggling to budget their money and pay their bills.
They work with tenants to create a realistic budget to ensure their bills are paid on time, as well as making the most out of their income. If you would like any more information on our Money and Budgeting Service or our bill-paying account, simply follow this link.
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