One of the things that I wish I had learned earlier in life is how to budget. Of course, now that I am a financial educator, I understand the life-changing benefits of budgeting.
Though a budget can completely transform your finances, many people still think of budgeting as a restrictive tool that limits their spending. There’s also this stigma that if you’re on a budget, you’re somehow “broke.”
These thought processes couldn’t be any further from the truth!
A budget actually helps you afford things and gives you the ability to spend on things that really matter to you. In fact, I like to say that a budget is a tool and not a trap. It doesn’t restrict you, but instead, it enables you.
So, perhaps by me sharing the advantages of budgeting, you’ll start budgeting your money and experiencing its life-changing benefits.
If you want to learn more about creating a budget, I recommend also reading our ultimate guide for creating a family budget.
7 Benefits of budgeting that will improve your life
As I reflect on my own financial journey, I can honestly say that budgeting has done more than help me improve my finances. My life has completely changed. Here are some of the benefits that I got from budgeting.
1. Helps you waste less
Prior to budgeting, I had no idea how much money I was wasting each month. I’d often go on expensive shopping sprees for things like makeup, hair items, and sometimes clothes. It was a behavior that stemmed from the idea that I “deserved it” or had “earned it.”
As long as I had money to pay my bills, I was good. Right?
Wrong!
I was literally wasting my hard-earned money, which kept me in the cycle of living from paycheck to paycheck. I didn’t have any money saved, so what I was spending could have been used for an emergency fund!
Budgeting opened my eyes to see exactly how much I was wasting each month. I quickly realized that I was spending on things that didn’t matter and items that I never even used.
Does that sound familiar? By implementing a budget, I was able to quickly change my spending habits. I started using some very helpful frugal tips to save money where I could.
Here’s the truth… In this day and age, who has money to waste? Absolutely no one…not even the wealthiest of us. I wouldn’t have identified this trap in my finances had I not started budgeting.
2. Builds your confidence
There’s something to be said about having confidence when it comes to your money.
When you know exactly how much money you have and that all of your bills are taken care of, you gain confidence. You don’t fear going out and having your card declined or not being able to enjoy life because you’ve budgeted for those things.
Budgeting is the tool that helps you gain this confidence.
When you budget, you know exactly where your money is going once you get paid. You know how much money you have to spend on each of your expenses and you’re even prepared for the unexpected!
3. Helps you achieve your financial goals
At the end of the day, a budget is simply a plan for your money. It’s a plan to help you navigate life and to reach your financial goals.
When you have a budget, you can allocate your money to things like paying off debt, putting money in savings, and even investing in the stock market. Having a budget allows you to see how much money you can put toward these goals and create a timeline to achieve them.
A budget is also a central part of your overall financial plan. You can check out this article on creating a simple financial plan.
4. Helps you plan the life you want
Ultimately, budgeting helps you plan for the life that you want.
Without money, you may not be able to do many of the things that you may desire to do. So making sure your finances align with your life goals is important.
The way to do that is budgeting.
If you want to travel, you can budget for it. If you want to buy a house, you can budget for it. If you want to have your dream wedding, you can budget for it.
A budget is not only at the center of your financial goals, but also your life goals. That’s why having one can help you achieve them.
5. Gives you control over your finances & financial freedom
One of the intrinsic benefits of budgeting is that you have control over your finances.
When you budget, you are telling your money where it needs to go. You have complete control over how your money is spent and what you put it toward.
Contrarily, when you don’t have a plan for your money it can control you. This means that you can end up spending above your means and even get into debt.
This takes away your financial freedom and your money now controls your life. So if you want financial freedom, it begins with budgeting your money.
6. Reduces arguments about money with your spouse
It’s no secret that arguments about money is one of the leading causes of stress in relationships. Ultimately, these money disagreements can end in divorce.
Although there are many things that can contribute to financial disagreements in relationships, a budget can help you get on the same page when it comes to how you manage your money.
Having a shared budget puts (and keeps) you on the same page with your spouse when it comes to your financial priorities and spending.
7. Makes you more grateful
In a way, budgeting can also make you more grateful. As you layout your finances, you should have gratitude that you have income or some means of supporting yourself. No matter how small or large, you have something.
Secondly, it makes you grateful that you actually have expenses to pay for. That means you have food, shelter, and the basic necessities of life.
And, if by some chance you have money left over at the end of each month, you should be grateful for the abundance.
Disadvantages of budgeting
With all of those life changes advantages of budgeting, there’s not one disadvantage to budgeting that I can think of.
Simply set aside time to budget so that it can be an effective financial tool for you.
Final thoughts on budgeting
At this point, you shouldn’t have any excuses. Budgets are beneficial financial tools that can help you achieve your goals. Not only that, you can gain many life-changing benefits by simply planning your money with a budget.
Need help starting? Check out these additional resources for creating a budget.
- 8 FREE budget templates to manage your money
- Step-by-Step Guide: How to create a budget in 4 easy steps!
- Which budget categories should you use?
- Budget Percentages: How should you spend your salary?
- Learn how to create a budget in Excel
As Certified Financial Education Instructor (CFEI), she has been teaching personal finances to women & youth for over a decade.
Fo is an established writer and expert contributor on the topics of personal finance, budgeting, debt payoff, money mindset, saving, entrepreneurship, investing, motherhood, personal development, and more.