Benefits of a budget

Benefits of a budget

A budget is a money plan that helps you to organise and control your financial resources, set and realise goals, and decide in advance how your money will work for you. A budget can be as simple as it is powerful. How does a budget help you?

A builder would never start work on a new house without a blueprint. You would not get into a car for a cross-country road trip without a map (we hope not). Yet many of us find ourselves making, spending and investing money without a plan to guide us.

Listed below are seven benefits of budgeting:

    • Know what is going on. Personal budgeting allows you to know exactly how much money you have. Furthermore, a budget is a self-education tool that shows you how your funds are allocated, how they are working for you, what your plans are for them and how far along you are towards reaching your goals.
    • Control. A budget enables you to take charge of your finances. With a budget, you have the tools to decide exactly what is going to happen to your hard-earned money, and when. You can be in control of your money, instead of having your money limit what you do.
    • Organisation. Even in its simplest form, a budget divides funds into categories of expenditures and savings. Beyond that, however, budgets can provide further organisation by automatically providing records of all your monetary transactions. They can also provide the foundation for a simple filing system to organise bills, receipts and financial statements.
    • Communication. If you are married, have a family or share money with anyone, having a budget that you both (or all) create together is a key to preventing personal differences about money handling. The budget is a communication tool to discuss the priorities for where your money should be spent, as well as enabling all parties involved to “run” the system.
    • Take advantage of opportunities. Knowing the exact state of your personal financial affairs, and being in control of them, allows you to take advantage of opportunities that you might otherwise miss.
    • Extra time. All your financial transactions are automatically organised for tax implications, for creditor questions, in fact, for any query that may come up regarding how and when you spend money. Being armed with such information saves time digging through old records.
    • Extra money. This might well be everyone’s favourite benefit. A budget will almost certainly produce “extra” money for you to do with as you wish. Hidden fees and lost interest paid to outsiders can be eliminated forever. Unnecessary expenditures, once identified, can be eliminated. Savings, even small ones, can be accumulated and made to work for you.

 

Our Employee Wellbeing Programme (EWP) is available 24 hours a day if you want to know more about financial planning.

2017-12-18T09:53:17+00:00