The Importance Of Budgeting

creating budget

In order to be at your best financially, it is important that you learn the art of budgeting. Budgeting is a financial tool that will help you understand your flow of money and if you commit to sticking to your budget, your financial future is likely to be positive. Without a budget you may be forced to apply for various types of personal loans online which is neither good for your credit or savings account.

Create a budget

If you have not created a budget, I’d advise you sit down as soon as possible and create one. It really is quite simple. Go ahead and write down all of your income sources and add them up. Then make a list of all of your expenses and add them up. Be sure to include all areas that you spend money, such as your main expenses like mortgage, auto loan, groceries, and utilities.

Additionally, include other categories like eating out, vacations, recreation, medical bills, and anything else that you have to spend money on. Including a miscellaneous category is recommended as well, as unexpected things do come up.

A valuable online free tool to help you create a budget is This website is very helpful in helping you keep track of your monthly expenses, budget, and even links to your online checking and saving information so you can see the big picture of where you stand financially.

Once you have made your list of income and expenses, see how you are looking. Hopefully your income is far greater than your expenses, but even if it isn’t, don’t be alarmed. Look at your expenses and cut out whatever it is you can so that your income increases. If you can eliminate eating out or some recreational activities for awhile, this ought to help you to get some debt paid down or put more money in savings.

Make a commitment

Once you have your budget created, you must make a decision to commit to it. This will be difficult at times, especially if you are an impulse shopper or tend to shop when you are feeling down in order to feel better. What you must realize is that by diligently sticking to your budget, you are creating a financial future that will be bright and you will experience less stress. If it would help, create a mission statement and put it in a spot that you will see every day. It could say something like this:

“I commit to diligently sticking to my budget because I want to be free financially and make wise financial decisions.”

Feel free to add whatever it is you feel would motivate you. The key is to make the commitment and remind yourself each day to stick to it.

Daily spending log

Sometimes it seems like the money just dwindles and you have little idea what you’ve spent it on. It would be a good idea to keep a daily spending log to keep track of exactly where your money is going. If you do this for a couple weeks to a month, you will quickly see if you are not being wise with your money. If you add up your log and find that you’ve spent several hundred dollars on clothing or recreation, yet you had a hard time making your mortgage payment, you can begin to make changes. You might not realize that $30 here and there can add up to a lot within a week or two.

The big picture

When you can take a look at the big picture, you will realize that decisions you make on a daily basis affect your future and that can be positive or negative. Learning to make positive financial decisions daily will ensure you a bright financial future full of freedom and joy. Begin today by creating your personal budget.

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