The Top 10 benefits (obvious and unexpected) of a personal budget
We all know having a #PersonalBudget can improve our finances, but budgeting has other unexpected benefits.
From better communication to more effective personal goal setting, Pathfinder Solutions can help you reap the rewards of personal budgeting.
“The budget is not just a collection of numbers, but an expression of our values and aspirations.” – Jacob Lew, former US Secretary of the Treasury (2013-2017)
Setting and sticking to a personal budget is essential if you want to gain and stay in control of your finances. And maybe a shift in mindset is required. Budgeting doesn’t necessarily mean restriction; it frees up your money, so you know exactly what’s available to spend.
The top 10 benefits of personal budgeting:
1. Gives you control
Developing your budget gives you control over your money. You’ll know how much cash is coming in and can plan how much you can spend and save. 2. Focuses you on your money goals
Everyone should have goals for their money. Whether paying off debt, increasing your savings, or freeing up more cash to invest in your business, a personal budget will keep you focused on achieving these goals. 3. Creates awareness of where your money goes
Have you ever looked at your personal drawings from your business and thought, “We can’t possibly have spent that much money last year!”? You’re not alone. Many people really have no idea how they’ve spent their money. 4. Builds better money habits
Reviewing your actual results against your budget each month will encourage you to think about your spending before you spend. 5. Helps manage debt levels
You’ll be able to plan for unexpected expenses instead of running up a debt to pay for emergencies. You’ll also be able to allocate more money for repayments to become debt-free faster. 6. Helps you achieve your wealth goals
Wealth goals are your long-term financial goals, such as saving for retirement or major life events. Because these are long-term, the sooner you start planning for these goals, the better. 7. Provides an early warning system
By regularly monitoring your spending, you’ll quickly identify upcoming costs and can adjust your spending if required. 8. Improves communication
Spending time developing your budget with your partner or spouse can help ensure you’re aligned with your spending plan. 9. Provides you with more money
If you have a personal budget and stick to it, you’ll end up with more money at the end of the year than if you hadn’t had a budget. 10. Ultimately, it gives you a better life
Not only will you end up with more money, but you’ll also likely have less conflict and stress over money.
Personal budgeting doesn’t have to be time-consuming or burdensome. Just one or two hours a month focused on budgeting could result in a vast improvement – not only for your bank account but also for your stress levels and family life.
Pathfinder Solutions regularly helps clients with their personal budgeting. Please do contact us if you’d like help developing your plan.
About Pathfinder Solutions
Pathfinder Solutions advisory team members have either owned or managed businesses, or are investors themselves, so we know first-hand the challenges you face in your world.
Sure we’re Accountants, but the best solutions in business come from focusing on more than just the numbers. Our real-world business experience delivers just that.