Budgeting

Unless you step up to the challenge of controlling your finances, your debt level and your financial future, who else will? Preparing a budget is the ideal tool to get you started. It's also really quite easy.

#1. A budget will show your current financial position.

Without a budget you are not able to clearly see the extent of your spending compared to your income. This is the most important role of your budget. It will show you whether you are living within your means or whether you are living on borrowed funds. It is also the tool that can show you where all your money is being spent. This allows you to answer important questions, such as "Am I wasting money on things I don't really need?" "Is my credit card debt to blame for my predicament?" and "How much better off would I be if I could manage to be debt free?"

#2. A budget points you to the areas that need your attention.

There are reasons why you are in this worrying financial position. It could be that you are spending more than you earn, you are not paying off the credit cards quickly enough and are paying interest on the interest. Or it could be that you're not saving for those inevitable emergencies and large financial bills that arise from time to time. The budget can provide answers that show you what is required to fix each situation.

#3. A budget helps you set goals to pay down the debt and save for emergencies.
A budget can help you calculate how much you need to put aside to save for emergencies and large unexpected bills. Is it the children's education? Is it a holiday for the family or yourself? Is it to set some money aside for retirement? Or, is it to replace the car, furniture or washing machine? If you are spending all you earn and not saving any, you may be condemning yourself to lifelong poverty. Not a happy prospect.

#4. A budget shows whose money you are really spending.

The budget can show you how much of your spending is being funded by others. How much is being funded by the Credit Card provider or the bank. The cost of this funding is interest. The interest costs are most likely the reason you are in this situation, currently. It can clearly show how much you need to reduce your spending to live within your means

#5. A budget can keep you on track and motivated.

Once you have set up a budget it is no use putting it into the drawer and forgetting it ever existed. It is meant to be a living document that can help you often. It can keep you motivated to stick to your plan by tracking your progress towards the goal and seeing your savings rising and debt falling.

A budget is the key to getting your finances under control and the debt worry off your back. Preparing your own budget is very enlightening and offers you the chance of finally getting control of your financial future. Isn't it worth a little effort? Don't you deserve it?