Every person and financial advisor I know, always recommends having a budget. A budget helps you keep track of your monthly finances. It helps you keep track of your debts and helps to establish and fund monetary goals for retirement. I think it’s a great plan for some people, but the question is, does everyone need a budget? Follow along to find out if it’s for you.
Can’t manage your debt?
Debt problems are the number one reason people need a budget. If you’re struggling with a mountain of debt and don’t think you can get out of it, having a budget can be the solution for you. This is especially true if it is affecting your livelihood. Even if your debt is not above $5000 or more, you can still have negative associated feelings that can affect your life. If this is you, then a budget can certainly help. If you’re not struggling with debt issues or you just don’t have any debt at all, a budget may not be for you.
Many of us want to retire early. People are no longer waiting until they’re 60 to enjoy their lives. Many of us want to enjoy what we have worked hard for well before then. I know for me, I want to be done at forty. If you’re lacking in retirement savings or just wanting to be done early in life, you need a budget. Such a plan can help you see what percent of your check is left over to contribute to your retirement savings. You can use a retirement calculator to see the projected growth of your investment up until the age of your retirement. This will help you see if you are on track to finish early or if you need to contribute more to reach your end goal.
If you’re like most people, the pandemic has made you sit and think about your financial position. It’s understood that most of us are just $500 away from financial ruin. Many of us don’t have anything to fall back on at all. In this case, if you have a dwindling or nonexistent emergency fund, it’s time to set a budget. You can trickle in a few dollars or a few hundred dollars per month. Establishing a budget will help you see where you can curb spending and save more towards your emergency fund. These funds can come in handy when an emergency like a vehicle repair or health expense comes up. No longer will you have to worry about where the money going to come from or how you’re going to pay it.
Many people need a budget, and if you’re feeling negative about your finances, slow to grow your retirement, or lack an emergency fund, it’s time for you to get one started. Want more great content?