Why You Should Absolutely Follow a Budget

| January 15, 2015 | 0 Comments

We learn a lot of things in high school like mathematics, English, a second language such as Spanish or French, Geography, History, etc. While all of these are great and important things to learn, another important one is usually neglected in school programs : creating and following a budget. Everyone knows that you should not spend more money than you make but in reality, a lot of people are struggling to pay their credit card debts and other expensive loans that they took because they planned their personal finances poorly. Today, we decided to talk about why you should absolutely follow a budget.

budget

By Following a Budget, You Will Make Sure to Spend Only What You Can Afford to Spend

In 2015, marketing is a dominant force used to educate people on products and services as well as to hype upcoming products. This ensures that consumers are bombarded with advertisements and marketing messages and it may drive some of them to buy more products than what they can afford.

People who are not following a budget cannot track the money that they have left effectively and tend to make most of their purchases with a credit card. What that does is that at the end of the month, these people can only afford the minimum payment on their credit card (or cards, in the worst cases of excessive spending) and they carry on debts on these cards for a very long time.

By setting up a budget, you will be able to track the money coming in and the money coming out of your wallet at all times, which is especially easy to do with a smartphone app.

You Will Discover That You Actually Have Money to Save

One of the things a lot of people complain about regarding their personal finances is that they cannot afford to save money for special projects such as a house or a car or for their retirement.

While we do not deny the fact that with the cost of life, it can be complicated to save money, we think that a lot of people will be pleasantly surprised to discover that they have money to save when they create their budget. Indeed, by clearly defining the money you spend versus your income, you will certainly notice that you have some un-allocated money. Save it!

Who Can Help You With Your Budget?

A CPA (Chartered Professional Accountant) can help you to create a balanced budget according to your situation, among many other accounting services. Indeed, whether you are a business owner or an individual, he or she will sit down with you, define your income, look at your spendings, discuss the ones you can reduce with you and provide suggestions on saving/investment opportunities.

This concludes our article on why you should absolutely follow a budget. If you do not currently follow a budget, we hope that reading this article has convinced you that it is necessary to follow one in order to manage your personal finances effectively.

Category: Personal Finance

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