Being prepared for such uncomfortable circumstances like a bad year, for example, a job loss or any economic slump keeps you secured at least for a while.Ĥ. Helps you manage sudden financial changes that can really affect your life. Whether using the money you have saved or borrowing money following a financial plan helps you manage your money to put your dreams into reality.ģ. Gets you ready for important life milestones: In life, you go through vital milestones such as marriage, education or a bigger family, a bigger home. Helps you save money to invest for future growth: By monitoring your savings, you take right decisions on future investments while taking into consideration both your personal circumstances and objectives.Ģ. If you have a clear view of where you are financially and you have a spending plan, you’re much more likely to improve your financial situation over the months and years ahead.Here are the 5 reasons why you need a financial plan:ġ. When you don’t have much money, the idea of creating a budget may seem intimidating and futile, but that’s ironically when you most need a budget. Instead, you can work on reestablishing your emergency fund. Because you were able to stay out of debt, you won’t need to allocate money monthly to a payment and the accompanying interest. If you manage to put $650 in your emergency fund and then need a $500 car repair, you can pay for it in cash instead of going in debt. If you make budgeting a habit, little by little, your financial situation will improve. A Brighter FutureĪs you can see, just taking the simple steps of meeting your monthly obligations and prioritizing your goals can improve your financial situation.
Having a budget can make the path to your goals more concrete.
6 REASONS WHY YOU NEED A BUDGET MOVIE
If you don’t have such a clear handle on your goals, you may instead spend that little bit of money frivolously every month-going out to eat with co-workers or watching a movie with friends instead of saving it. By doing that, you may be able to establish your $1,000 emergency fund in a year, eight months ahead of schedule. Sure, that’s a long time, but you may be able to shorten that time by putting any extra or windfall money into the savings. A budget helps you see that if you diligently put away $50 a month, you’ll have your emergency fund in 20 months. Maybe you can only put aside $50 a month for that goal. Let’s say one of your goals is to save $1,000 in an emergency fund, but money is tight. Without a budget, it’s easier to spend money frivolously because you aren’t as aware of the repercussions. If you don’t have a budget, you may find that you don’t have enough money to pay all your bills, which is never a good position to be in.
If money is tight, a budget can help you prioritize your obligations. There are several reasons why you need a budget if you’re broke.
Yet, this is when you most need to budget. You may be tempted to join the 59% of Americans who don’t budget ( CNN). When you don’t have enough money coming in to save for anything fun like a night out on the town with your spouse or a yearly vacation, perhaps even not enough money to meet your monthly obligations, budgeting can feel like torture. The rest of our marriage, budgeting has been a struggle. My husband and I have been in that position twice during our nineteen-year marriage, and budgeting was fun for me because I could see how we were meeting our goals. You have enough money to pay all of your bills, and you have extra money to put aside for things like a vacation, holiday gifts, etc. When you have plenty of money coming in, budgeting can be easy.
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