It doesn't matter whether you earn £10k per year or £1,000,000 per year - if you don't know how to manage your money and tell it where you want it to go, you will have nothing much left at the end of each month. So grab a pad and pen, because at the end of this post sure will be wanting to scribble down your income and expenses and start planning...
WE WORK FOR MONEY
We exchange time for money, in our jobs or our businesses. Time is precious, so the money we got in exchange for time ought to be looked after. Many people would say they waste money when they don't keep to a budget, and this is literally time wasted. If you set a budget, and keep to it, you have at least ensured that those precious hours worked were not wasted time.
IT MAKES YOU BE CONSCIOUS OF WHAT IS IMPORTANT TO YOU
Where you choose to spend money indicates what is important to you. When you budget, you are choosing how much to spend and where. For example, you can choose to set money aside to invest for your future. You can choose to spend money on fresh food and groceries, working to improve your daily diet. You can choose to pay your rent and utilities to make sure you're providing yourself with a safe and secure home. You can choose to put money aside for car maintenance so that you're not leaving yourself exposed when an unexpected emergency comes up. You can choose to put money aside for travel so that you feed your explorer urge. When you don't choose, you are not being intentional on what is important to you. Before you know it, £100s are spent on takeaways, impulse purchases online, late payment fees on bills you missed. Are these really the things that are important to you?
...it reinforces your decision to work as a team, making joint decisions and focussing on your joint bigger "why". If you can agree on money, you will find harmony in most other areas of your life. There are so many arguments about money when couples do not work together - a budget is your joint plan about what to invest in for the coming month. It brings wonderful alignment - even if you have the occasional dispute about the Sky TV football subscription.
IT IS YOUR WAY OF MAKING SURE YOU PAY YOURSELF
So many people get to the end of the month and have nothing left after all bills and spending has happened - meaning there is nothing left for "you". By working "you" into your budget, it means "you" get a cut of all the money you earned this month rather than paying everyone else first and you last, or not at all.
ITS THE WAY YOU MAKE GOALS ACTUALLY HAPPEN
When you have a goal - your budget is the way you can make it happen. Whether it be to road-trip across the USA, buy your first home or start a new business - all these require money. You can budget for these goals on a monthly basis and watch your dreams turn into reality, bit by bit.
So really, you should want to budget. If you don't budget, one thing is for sure. You will literally have no idea where your money went - making all those hours at work worth it right?
P.S. IT PUTS YOU IN CONTROL
Read our blogpost on being in control of the month before the month controls you for more tips on how to win with money....