3 Sure Signs that You Need to Start a Budget
Are you struggling financially and not sure where to turn? Even if you are financial stable right now, would you still be able to meet all of your financial obligations if there was an emergency? If you answered no to either of these questions, the first solution you should try is to start keeping a budget.
This will help you manage your money better. If you are still not convinced that you need a budget to secure your financing, here is a list of three basic signs that indicate that you should definitely start maintaining a budget on a weekly or monthly basis.
1. You Are Not Sure Where All Your Money Goes Each Month
The first sign that indicates you need a budget is if you are not sure exactly where you spend your money each month. You may make feel like you make enough money to pay all of your bills, but at the end of the month you do not have anything left. Keeping a budget will help you track your spending habits and find out exactly where your money is going. This can be an eye-opening experience and can help you change your spending habits for the better. Having a budget in place can also prevent impulsive spending, because you will need to think about your budget before you make your purchases.
2. You Cannot Pay Your Bills On Time
If you seem to never be able to pay your bills on time, then you definitely need to start keeping a budget. Consistent late payments can really damage your credit score and may prevent you in the future from obtaining a loan or a mortgage. Creating a budget will force you to set money aside to pay for all your regular bills, such as utility bills, rent, phone service bills, and auto expenses, first before spending the money on something else. It will prevent you from spending money on things you do not need and will help you have the money always available to pay your bills on time.
3. You Do Not Have Any Savings Set Aside
Experts say you should have at least three to six months of your income set aside in a separate savings account. If you do not have this safety net, you may be in trouble financially at the first signs of an emergency. Think about what you would do if you become sick, had an injury or lost your job. Would you be able to keep paying your bills with no income? Chances are that any such emergency would force you to take out a costly loan, if you were even able to obtain one without any steady income. Having a savings account will help you stay financially stable ever during an emergency.
If any of the signs listed above describe your current situation, you need to start keeping a budget on regular basis. This is often the first step to finding financial freedom. This is because a budget will hold you accountable to making sound financial decisions and will change the way you spend your money. If you need help setting up a budget, you can speak to a financial counsellor. He/she will be able to help you set up a workable budget that you can maintain.
Image courtesy of AdamR / FreeDigitalPhotos.net