Before you say you can’t face making a budget, you may want to read this
2 MIN READ
You’ve probably heard the word ‘budget’ countless times over the past week or so.
Most experts agree that regular budgeting is the way to keep on top of your finances. But creating a personal budget probably isn’t most people’s idea of fun.
It’s easy to come up with reasons not to budget. Here are 7 reasons people say they don’t budget and why they might just be wrong.
1 I don’t want to deprive myself
When some people think of budgeting they automatically think scrimping and saving. But budgeting isn’t about spending as little money as possible then feeling bad if you do buy something nice for yourself.
The first aim of budgeting is simply to make sure you aren’t spending more than you earn.
Even if you are on a very tight budget, you should still aim to enjoy life. Buying a takeaway coffee or going out to eat occasionally should not be forever out of reach. And tracking what you spend your money on tells you where your money goes but it doesn’t actually reduce your money.
2 I don’t want to know the state of my finances
Some people never open bank or credit card statements or check their account balances online because they just don’t want to go there.
However, sooner or later there may not be enough money in their account. A bill may not get paid or a card may get refused. At this point, any issues with their finances have to be faced and they may have to pay additional fees and charges they might otherwise have avoided.
It may be possible to continue this living way indefinitely but it’s an expensive way to live and it can damage your personal credit profile making it more difficult to get approved for loans, including mortgages, in future.
3 It sounds like too much work
It doesn’t have to be. You can set up a basic budget in a lunch time and refine it as much or as little as you want later.
The first thing you need to work out is how much income you have coming in each week or month then how much you spend on essentials and non-essentials.
If you need to, you can then choose to reduce your spending or increase your income.
4 I know I won’t cut back even if I know I should
You can protect yourself from your own overspending habits by setting up a direct debit to transfer money out of your main account each week or month to a savings account or deposit account soon after you get paid.
You might also want to ensure that it’s not too easy to claw back that money (in case you spend it) but that if you really needed it you could get it.
5 I don’t like maths
Fortunately, you don’t have to be a maths genius to budget. There are plenty of budgeting tools available that will automatically keep a running total of your income and expenses and take away your total expenses from your total income for you.
Alternatively, you can make your own budget on a spreadsheet if you are already familiar with a spreadsheet package.
6 I’m making a good living
Even if you are doing well you might like to know that you are on track to meet your larger goals.
If your biggest goal is to save enough money for a deposit for a house you may get there quicker if you cut down on non-essential expenses.
But you won’t know precisely how much you are spending on non-essentials and how much you could save towards a deposit unless you track your spending.
7 I’m not looking to buy anything big right now
You might not be saving a deposit for education fees, a house or a car right now and may be happy to use up all your disposable income. But things change.
In a year from now or in 5 years, you might decide that you want to start your own business or take time off work to have a family and you might wish you’d been tracking your spending so you could have been saving regularly for a while.
We can’t know what’s around the corner but having a budget may help us smooth out life’s ups and downs.
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