There is a famous saying – “Budgeting is the first step towards financial freedom”. Living without a budget is like travelling aimlessly without any destination in mind. Either we can drive the life or the life will drive us. The latter case is very tough and wasteful. However, all of us know it and have tried it at times but failed to stick to it. The sooner we realise the value of budgeting, the better we can plan ourselves financially. We can manage ourselves within given means only if we start with a budget in mind and yearn to make it possible. Budgeting is nothing more than knowing yourself. Nobody can make a budget for you better than yourself and you are the best judge of your needs and wants. But we would like to highlight a few benefits of budgeting and abiding by it religiously.
- Helps you understand your spending habits: Budgeting reveals your habit to yourself as to how you have been spending money and where your money has gone. Hence, you can check your bad spending & use that money for better things viz- investment.
- Develops new habits: Since you will realise your bad habits, you are likely to adopt some good habits that will have less monetary cost and high social values.
- Sets your priorities right: Once you start budgeting, you will be able to prioritise your spending. You can make a priority list of spending starting from most necessary to necessary, manageable to avoidable.
- Helps in restricting impulsive buying: As you have now your priorities right, you will spend systematically as per your requirements and avoid impulsive buying. This is a very important factor that decides the achievement of your long-term financial goals. We often buy things on credit card and that debt keeps revolving without any end to it. This is in the core of a debt trap. Therefore, you must do budgeting to safeguard from the habit of borrowing.
- Growth in savings: As a result of a better view of your income and expense, you will have more money at your disposal and you can thus save more.
- A Peaceful life: You are bound to live a financially peaceful life if you have left all your bad spending habits, inculcated good financial habits, set your priorities right, grown your savings and moved ahead on your way of achievement of financial freedom.
Having said this, it is understood that budgeting might be difficult in early days, but its benefits are so immense that once you start budgeting and make a habit to abide by it, you will not live pay-check to pay-check.
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