Reason 1. Growth of prosperity.
We often meet the conventional wisdom that managing a family and personal budget is not only boring, but also useless for the growth of finances. Or there is an objection that there is nothing to lead, all the money is spent end-to-end (although there is no understanding where), there will be more money – then it is worth starting to count. With this approach, you risk not counting it at all.
Because if you do not count your money and do not understand where it goes, you can spend any money, no matter how income grows.
We want to dispel all these myths and give 5 of the most important reasons for keeping a family and personal budget.
The most important reason to keep a family budget is, of course, its replenishment, and, as the main step, the growth of your financial well-being. As we said above, calculating a family or personal budget directly affects your well-being. In this case, your income has a chance to grow, because you count your expenses, plan your expenses and bring it all together in a single budget.
Reason 2. Savings wise = a plus for your budget.
If you are running a family budget, you can see the opportunities in your budget – where you could save money without losing comfort (plan ahead or read forums to find a good product or a budget trip). Do not overpay, because you could have a vacation, purchase or pay for services at a much cheaper price.
The best example here is vacation, travel, because if you study the relevant travel blogs and forums, you can save a lot of money. Such planning is exactly what needs to be included in the family and personal budget.
Reason 3. You don’t overpay for risks.
When you consider your personal budget, you insure yourself against risks, which means you protect your money from unexpected expenses. Most of the situations that you can find yourself in, you can lay in the family or personal budget and provide for this in a separate article, “insurance fund”. We are often told that we cannot postpone because of unexpected expenses such as a breakdown of equipment, a car, or, say, the need to renovate an apartment.
All this must be foreseen and some part of the amount of the cost of all these things should be set aside. All these risks do not come true at the same time. Therefore, if you budget at least part of the amount, you will also save a decent amount, and not run for an urgent loan.
Reason 4. You feel psychologically calmer and more confident.
This is one of the main reasons to keep a personal and family budget. Many of our students admit that at first, when they started calculating their budget, they faced fear, fear of the unknown. This happens when you are not in control of the situation and your body, your brain, does not have an appropriate plan at hand and does not understand how to react to this or that situation.
We live in a constantly changing world and if you do not understand and most importantly do not understand your current financial situation and financial situation, you cannot take the next step. As we said, constant income growth will not help here. If you are used to spending everything, closing your eyes to where the money goes, then with the growth of income you will repeat the same thing, just your appetites will increase.
Perhaps, if you calculate your budget and find articles that can be cut, you will not have to work several times more to buy this or that item. Income needs to be raised, but this does not eliminate the need to work on the budget.
Reason 5. Maintaining a family budget brings the family together.
Yes it is. There are no disputes about money, about where it is, who spent it and where. Your family has a clear plan for the week, month and year, and each family member understands where the money goes and where it comes from. When everyone in the family starts talking frankly about money, planning expenses together and including the articles necessary for all family members in the family budget, there is no more room for quarrels about money.
If you involve your children in managing the family budget, you can explain to them how money is made, how spending is planned, and where the money goes. The main thing is that the children are already at school age, able to read and write, otherwise it is too early to include them in helping to manage the family budget.
These were our 5 reasons to keep a family or personal budget. We are often asked what to do when personal finances are at a standstill, how much you spend – so much you earn.
We traditionally answer that you need to start with financial literacy. This is the first step on the path to your well-being, and you can start it with our Game, in which, by solving financial situations, you acquire new financial skills, which means your financial well-being grows.