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How a Budget Can Save You Money and Time
One of the most simplest ways to save money is the creating a budget. Even better, the small amount of time you invest in the beginning creating one saves you something else in the long run: time. Even if you’ve never considered putting a budget together before, we’ve put together a few compelling reasons why you might consider it!
Helps You Address Debt Intentionally
If you are debt-free, that’s great! If you’re trying to become debt-free, or at least get a better handle on your debt, you won’t get there by dealing reactively to it. You need to create a plan for dealing with your payments and put that into your budget. As you search for ways to pay that debt off faster or refinance, you’ll be saving money you would otherwise have spent on interest payments.
Assists You With Saving
Interestingly, just as with debt, no one ever “accidentally” saves money. You need to be intentional about it, and while it makes more sense to be saving when you are completely debt-free, there’s also a logic to having short-term savings like a rainy-day fund for emergencies. But you’ll also want to think about what your financial goals are further down the road: budgeting a consistent monthly amount to go towards those long-term goals can help sharpen up the possibilities from something vague to something more definite. The money you save in the short and long term is money you won’t have to generate later on.
Forces Discipline On You
If you have a certain amount allocated for groceries in a given month, you need to adhere to it in order to make all the other numbers work. So that means no reaching for that tempting candy bar in the checkout line! But in all seriousness, limits can really be good for us, especially if they are oriented around a goal. Those limits also save us time: they keep us focused.
Pushes You Creatively
As the lines and constraints of a budget start to fall in place, you are forced to be creative about spending. You may decide to sell some things you aren’t using or to earn some extra income to hit your goals. A budget brings perspective and reminds us of what we are working towards. In a more creative state, we might not just save money, but earn extra income.
Challenges You to Audit Yourself
Creating a budget puts you into a mindset of checking what you’re spending and in which areas. You’ll find yourself asking whether you really use that subscription service or whether you really need that gym membership you’re no longer using since you switched to home workouts in the pandemic. So much money is spent simply by default: no one is checking to see if recurring charges still add value. Budgeting reminds you to check everything.
Makes Treats Sweeter
When you’ve worked hard to create a budget, pay down debt, save money, be disciplined and creative, and audited all your expenses, it means that much more when you treat yourself to a night out with loved ones, or on a thoughtful gift for a friend. The reward of discipline always tastes better than the reward of laziness.
Because they help us be intentional with our spending, budgets help us see money for what it is, a means, not an end.
This content originally appeared in our monthly Open Calendar Club newsletter.