organize your finances!
take back control of your life with our Budget Boss Binder.
5 Major Reasons Why Budgeting Is Essential To Your Financial Success
Are you constantly wondering where all of your money goes? Or why you can never seem to afford your bills? And, ugh! If ONLY you could save enough for those new shoes!
Well, the answer to your money problems is simpler than you think.
And, I am positive that you make plenty of money. But, it is where your money is going each month that is the real issue. If you’re not sure where all your money goes each month, then that is HUGE issue!
(We’ll fix it though.)
And, HEY! You wanna know the answer to affording your bills and becoming financially successful?
This post contains affiliate links. All reviews are our own, honest opinion. See disclaimer here.
The answer to your financial success + affording your ultimate life is having a budget!
Having a budget and sticking to your budget is an essential step in becoming financially successful. Why? Because, without a budget, you won’t have the proper systems in place to advance your money game.
You can see if your budget is on the right track for financial success by answering 5 major questions:
- Do you have a budget system that decreases your money stress?
- Do you stick to your budget + spend your money strategically?
- Are you aware of how much money you make and how much money you spend?
- Does your budget help you save mad cash?
- Does your budget save you time?
If you answered no to any of these questions, then something needs to change financially in your life to realign you on your journey to financial success.
But, as I said. It is easier than you think.
1 // DO YOU HAVE A BUDGET SYSTEM?
Do you have a budget system that you enjoy using and that decreases your money stress?
If you answered no to this question, then it is time to find a budget system that works best for YOU and stick to it.
There are tons of budget systems to choose from, including:
- the cash envelope system
- percentage based budgeting
- zero based budgeting
- 50/20/30 budgeting
And more! (Do a quick “budget systems” search on Pinterest and you can browse tons of great blog posts explaining various ways to budget.)
This is the basis though our modified percentage based budget:
1.) Divide your total monthly expenses by your total monthly income, giving you the percentage for the amount of your budget you NEED for bills, food, etc. (70% of our income is used for such things)
2.) Use the remaining percent out of 100% to budget for what is important to you (you could save 30% of your income, save 15% and spend 15%, etc)
So, find a budget system that works for you (or modify one to fit your lifestyle perfectly) and STICK TO IT.
2 // DO YOU STICK TO YOUR BUDGET + SPEND YOUR MONEY STRATEGICALLY?
As I mentioned, having a budget is crucial to your financial success because if you don’t have a budget, you’re probably wasting a lot of money. Like a lot, a lot of money.
So, if you answered yes to question 1 above (do you have a budget system), here’s my dreaded follow-up question for you: Do you STICK to your budget?
If you answered no, that you do not stick to your budget, then financial success ain’t gonna be yours anytime soon. Why?
Because you cannot become financially successful if you’re out wasting money, maxing out credit cards, and not saving a dime…you know? I mean, if your daily routine consists of a morning trip to Dunkin’ Donuts to grab a coffee and a bagel, you’re not going to think twice about spending that $5.
But! Think of how much money you’ll have if you strategically redirect that money automatically into a savings account each pay cycle? Bet you could pay off debt quickly or save for that thing you want faster if you were sticking to your budget and spending your money strategically.
See, having a budget system (like the percentage based budget) allows you to control your money so you can make more educated decisions about where to spend your money and where to save it.
So, once you work so hard to pick and setup a budget system, do yourself a favor and STICK TO IT!
(Sticking to our percentage based budget is super easy since we automated our finances. Read more about how to automate your budget, here.)
3 // DO YOU KNOW HOW MUCH MONEY YOU MAKE AND SPEND?
This seems like a silly question, but you’d be surprised how many people have no fucking clue how much money they make and/or how much money they spend.
And, you know what’s worse than never having any money? Never knowing how much money you DO have. I mean, how do you pay your bills, buy your groceries, and have money for fun if you don’t know how much money you ever have at any given time?
When friends come to me with help on budgeting, the first question I always ask is, “how much money do you earn and spend each month?” And, 9 times out of 10, their answer is, “I dunno.”
Queue the blank stares! Like, uhm, what? ‘Cause if you don’t know how much you make and spend, then you’re guessing.
And, if you’re guessing about your personal finances, then chances are – YOU’RE WASTING MONEY. A lot of money.
I think we can all agree that nobody likes to waste money, so ensure that you’re not by creating a budget, and, you guessed it – STICK TO IT!
Because, it is essential to your financial success.
Unsure if you’re wasting money? Use a financial planner to find out. The results might shock you!
4 // DOES YOU BUDGET HELP YOU SAVE MAD CASH?
I mean, it is unlikely that you are “saving mad cash” if you don’t have a budget because you don’t have a strategy for your money and you don’t know where your money is going.
But, by setting up a budget + tracking your finances, you are able to see exactly where your money is going, meaning you can cut costs where poor spending is happening – saving you mad cash.
You should grab our Budget Boss eBook to master your finances and for 50+ ways to realistically save mad cash each month.
And, there are so many other reasons to save money both through better spending and through means of an actual savings account. You could save for:
But, how easy is it to save money for all these important things if your budget (or lack thereof) isn’t helping you do so?
Having a budget will help you easily save the money that you would otherwise be wasting if you didn’t have a budget, which will ultimately lead you to your financial success.
As I said, when you see your flow of income, it is simple to redirect the money you waste on coffee, entertainment, etc., to a savings account.
So, use your budget to help you quit wasteful spending so you can redirect that cash towards something more important than coffee.
5 // DOES YOUR BUDGET SAVE YOU TIME?
Before I had a budget, I would spend at least 30 mins a day analyzing my families personal finances trying to figure out our financial well-being.
For instance, anytime we had a bill to pay or wanted to eat out or go to a movie, I would have to calculate if we had enough money. Talk about ANNOYING! Not to mention time-consuming!
But, now that I have a kick-ass automated budget system, I NEVER have to spend time budgeting. And I mean NEVER.
With an automated percentage-based budget, I always have the right amount of money in each of my bank accounts to cover my automated bill payments, to save money, and to have spare money for fun.
Our automated budget system not only saves us so much time each month, but t has 100% been the most important key to gaining financial success because our finances are automated for success.
See, we are able to easily afford all aspects of our lives because our budget forces us to.
RELATED READING: How You Should Budget If You Want To Save Time + Money
As you can see, having a budget is essential to your financial success. You just cannot become financially successful if you don’t have a budget.
If you answered “no” to many of the budgeting questions in the post, it is a clear sign that you need to take your finances more seriously. And, the first step in rocking your finances? Setting up a budget.
Once you have a budget set up and you’re consistantly sticking to that budget, the rest of your financial goals will come easily.
Remember, if your finances need a kick in the ass, check out our Ultimate Budget Boss Bundle where you learn every bit of info you need to become financially successful + you’ll snag a FREE copy of our financial planner!
Oh, and….at the end of the day, money isn’t everything.
What methods aide you in your financial success? Comment below!
share with friends