Life is full of tasks that initially seem unenjoyable and of little value. However, they often provide long-term benefits we may not appreciate at the time. Regularly going to the dentist is a good example. No one really enjoys the process, but your long-term dental health is worth the hassle. Who looks forward to rotating tires? No one, probably, but doing so will extend the life of your tires and save you money in the long run.
Many would classify preparing a monthly budget, as a thankless, unenjoyable task. If you’re not a budgeter, it may be hard to see the benefits of creating one every month. However, for those of us who prepare one faithfully, we can’t imagine starting the month without a spending plan in place.
Benefits of Budgeting
So, what are the benefits of taking the time to create a budget each and every month? Here are six reasons to budget you should consider.
1. It helps natural spenders to save, and natural savers to spend
Each of us is wired differently. If you found a forgotten $100 bill in your coat pocket, some would want to spend the found money on a surprise treat, while others would see it as an opportunity to add it to the emergency fund. Neither is inherently right or wrong, just different.
A monthly budget allows the natural saver to more easily spend because they know that saving is also occurring. Likewise, the natural spender more easily saves knowing that they will also be able to enjoy the lattes they crave.
2. It creates accountability for married couples
The budgeting process should be a joint effort, not something prepared by one spouse and imposed on the other. Many married couples that I’ve counseled have commented on how the budgeting process actually strengthened their marriage as they learned more about how their mate thought about money and worked together to meet both of their needs.
3. It helps you meet your short and long-term goals
A monthly budget helps to make sure that an appropriate amount of funds are set aside for your goals each month. Waiting until the end of the month, hoping that something is left over, is no way to meet these goals in a timely manner.
Whether saving for next year’s vacation or for retirement several decades from now, a budget will help ensure something is set aside each month for your financial goals.
4. A budget will expose your bad spending habits
Most of us have spending weak spots of some type. Whether it’s eating out a little too often, or downloading a few too many songs, a spending plan will shine a light on those areas and give us the opportunity to change them.
5. It increases your financial peace of mind
Wouldn’t your vacation be more enjoyable and less stressful if you didn’t have to worry about how you were going to pay for it when you get home? Or, how much more comfortable would you feel knowing that you had a fully-funded emergency fund when (not if) an unexpected bill arrives?
Don’t increase tomorrow’s uncertainty by not planning for it today.
6. It helps you avoid debt
One of the most common causes of unplanned debt is a lack of budgeting. The unexpected medical bill may be paid with a credit card if there is no emergency fund already funded. A car replacement may need to come with a payment book because some money wasn’t set aside each month over the last few years in anticipation of the need. Or, you and your child may be strapped with student loan payments for decades because money wasn’t set aside for college as they were growing up.
Creating a monthly budget doesn’t have to be a time-consuming and complicated process. My wife and I still prepare one each month with paper and pencil in only a few minutes.
There is a learning curve, so show you and your spouse some grace as you begin the process of budgeting. Most of us are bad at budgeting when we first begin but commit to it for at least 90 to 120 days. If you stick with it, the long-term benefits are worth every minute spent.
Free Monthly Budget Spreadsheet Template
- This simple monthly budget template makes budgeting fun and exciting.
- Easy-to-follow instructions so you can get started budgeting in no time.
- Access your budget online from anywhere. See all features