Four Questions To Determine if you Need a Budget

budgeting mistakes to avoid

Budget.  The dreaded B word that most of us can’t stand.  Most of us think creating a budget causes stress and an overwhelming feeling when it comes to money.  However, budgeting can be a great asset to paying down your debt and building your wealth.   Knowing whether or not you need a budget can be the first step to financial freedom.  It’s important to know where you’re money is going so answer these questions to see if you need a budget?

Do you have monthly expenses?

Most of us do have expenses they’re responsible for.  The average person feels that they have too many bills.  If you have expenses then you need a budget to see where you’re money is going.  A budget can help track your spending.  It can show you how much of your money is going towards groceries, utilities, rent or mortgage and how much is going towards savings and paying down debt.  

Do you have monthly income?

Again, most of us do have some sort of monthly income coming in.  A budget can help prevent you from overspending.  Budgeting can help you allocate your income to minimize your expenses and pay down debt faster so you can actually enjoy your money.

Do you wonder where you money went at the end of the month?

Do you ever get to the end of the month and think “where did my money go?”  If so, then you need a budget.  Mindlessly spending is one of the biggest ways people go into debt.  They start off their month on a high.  They spend too much on eating out, go shopping, and act as if they don’t have a worry in the world.  Then by the end of the month the reality sets in.  They have bills to pay and don’t have enough money to go around.  

Do you want to get out of debt?

Having monthly payments towards your car, credit cards, stores, etc. can really eat away at your spending money.  Add up all of your monthly debt payments?  Wouldn’t it be nice to have that amount extra each month?  I’m sure it would!  By having a budget you will be able to put more of your money towards your debt to get out of it faster.  

Do you want to retire comfortably?

Most of us want to retire without having to worry or live on a fixed income.  Budgeting can really help us maximize our retirement savings at an earlier age.  You will be able to put aside a specific amount of money into your employer-sponsored retirement plan or Individual Retirement Account (IRA) to help accumulate your retirement money.

If you answered yes to at least one of the above questions, then you need a budget.  A budget is a wonderful tool that can ease your money stresses.  If you’re like most Americans who are living paycheck-to-paycheck then a budget can help you break that cycle.  Spending your money on paper first can really help you see where you’re money is going and if you need to make changes.