Why a Budget is Needed - Finance Analysis

When you hear the word budget, do you want to run screaming the other direction? No one really thinks of budgeting when trying to come up with something fun to do. Yet it is a necessary part of personal finance. Why you may ask, simply because without a budget how do you know if you are being smart with your money?

Planning a vacation without determining where you want to go, and how you are going to get there can leave you lost and frustrated. Thus wasting your vacation time and adding more stress to your life. Your money is no different if you don?t plan for what should happen to it and then monitor it then it could end up way off track and delayed! Making you even more stressed and wasting your valuable investing time.

In addition budgeting helps you decide where to cut expenditures. It is hard to make the right reductions if you have no clue where you are spending too much money. This is the same as when someone is trying to figure out if they need to eat less or workout more. If you don?t realize that you are already at your minimum for calories then you could cut back more and end up sabotaging your progress.

Budgeting and the side effects of the knowledge you gain from this process does not all have to be bad. What if you find out that you are saving way too much or really do have the extra room for more entertainment stuff? Sometimes the stress of feeling like there is not enough comes from the fact that you may be over saving. Too much of anything is not always good for us. We are meant to save some, spend some and give some.

Don?t hate the budget; it does not have to be worse than cleaning toilets. Look at it as good for you so the process goes better. Just keep in mind that paying attention to your budget keeps you on track for what you want from life and brings more benefits!

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Posted in Money Tags: budgeting, finance, finances, financial freedom, financial literacy, money, Money Management, personal finance, self improvement, wealth creation, women and money Both comments and pings are currently closed.

Source: http://www.eftreport.com/2012/03/06/why-a-budget-is-needed/

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