I was teaching a class of young people a couple of weeks ago and we were talking about budgeting or what some would call a spending plan.
After a while, the conversation turned quite disturbing. That’s because I found myself trying to convince them that having a spending plan was a good thing.
A statement made by one of the young people was, “I can’t take the money with me (when I die), so I am going to spend it on what I want to, now.”
These young people had a short-term view of money.
So, I write today to convince you that having a budget or spending plan is good. And hopefully, provoke you to create a spending plan and see it differently than you currently do after you read this article.
A budget or spending plan is a plan for spending your money in a given time frame. Why is that not a good idea? Wait, why is that a good idea?
A budget is about setting targets for how you spend your money. This is where you decide how you want to spend your money going forward.
There are many good reasons for a budget or spending plan I will only give you five here:
- A budget reduces money-related anxiety. Money problems and fights are the leading cause or one of the leading causes of divorce in this country. And for those of you who are single, you can still fight and worry about money. What about those money worries. “How am I going to do this or that?” A spending plan can reduce and eliminate that.
- A spending plan gives you control. With a spending plan, you are telling your money where to go and what to do. I do not know about you but, I work hard for my money, and I want it to go where I want it to go. It’s mine. When you don’t have a spending plan, the marketers are pulling on your money everywhere you look, and you are bound to spend money on things you did not need or really want.
While you are reading this, someone somewhere is trying to figure out how to sell you something.
- A budget helps you reach your goals. Having a spending plan helps you save money. And with the savings, you can build assets and improve your quality of life. You can buy things of value like houses and businesses. It helps you to avoid diversions that may try to keep you from reaching your goals.
A plan for spending your money – a budget, can also be a plan on how not to spend your money. It can help you avoid bumps in the road to your goals and dreams.
- A budget helps you be a better steward of your money. Without a plan to spend your money, are you being the best steward of your money that you can? In today’s environment, it is crucial to have a plan to spend money.
- A spending plan is crucial in business and should be for “You Incorporated” as well. Would you think of running a business or managing a business without a spending plan? Can you imagine the chaos that would come by not having one? Why would you manage your personal finances without one?
Although there are more, there you have it, 5, very good reasons to have a spending plan. A spending plan is crucial to your financial health and wellness. I think it is a mistake to try to manage your money without it.
Are you convinced that you need a spending plan? Leave a comment below and subscribe to the GoldenRules Blog and learn how to create a winning spending plan for you and your family. And share this with people that may benefit.