As a personal finance blogger I'm a big proponent of having the family do a budget because it has the effect of helping you to better regular spending, see where the money is going, and figure out places where you can cut back. It helps you to take control of your finances.
One thing that I realized, however, was that not only does doing a budget help your finances, it has the side effect of also helping other areas of your life.
7 Reasons To Budget
Here are five quick side benefits of doing a budget for your family.
- Less arguments and fights about money: Before we had a budget and cash flow plan set up at our house, we constantly argued about little things when it came to money. We just didn't feel secure, and any little thing could set us off because we felt like we were hanging on by a thread. Small expenditures by myself or my wife could set the other off because we weren't sure if we would have enough money at the end of the month. Now that we have a set budget, and specific amounts allocated to all spending categories, it takes the pressure off, and we're able to trust that we've got a plan, and we don't need to worry about what the other is spending.
- We have a sense of peace: Now that we've got a plan we don't have the constant stress of worry that we won't be able to pay all our bills, or that we're falling behind in retirement savings. Now we know what our financial situation is, we're planning ahead and making sure that we're set.
- No more panic when the “unexpected” happens: When unexpected expenses crop up like emergency room visits, car repair bills or the need for a new water heater, we don't have to panic and worry about where we'll get the money to pay for the problem. Instead, we've budgeted for an emergency fund, and we're ready for when the unexpected happens.
- It makes the word “NO” easier to say: Before we had a budget and a plan saying no to frivolous purchases wasn't as easy because we figured we could afford something, and we'd just put it on credit in case we couldn't. Now we know what we can afford, we budget for the things we want, and we pay cash. It makes it a lot easier to say no to a purchase when it isn't budgeted for, and you don't have the cash saved up!
- You have extra money to use to help others: I guess this one does actually speak to your bottom line, but to me it's priceless to be able to help others more now, because we just have more left over. Because we've budgeted, our surplus has grown, and we've been able to give more to causes we believe in, and more importantly, to our church. Without a budget, that wouldn't have been possible.
- Better communication in the family: When we started budgeting at our house we had monthly family budget meetings. The result was that we were talking more about our joint finances, and we were just communicating more in general. It lead to us feeling more connected as husband and wife, and generally improved things in our house.
- You feel empowered: When you have a plan, and your budget is working effectively, it gives you a sense of empowerment, as opposed to the sense of helplessness when your checking account dwindles away to nothing and you're not sure where the money is going.
Our family has been doing a budget for a while now, and it has been a huge blessing for our household. It had a lot of wonderful side effects that we didn't anticipate when we first started.
So those are my good reasons to budget, beyond just the monetary reasons. What are yours? Share with us in the comments!
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