12 Reasons Why You Need A Budget

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These questions might make you a bit uncomftorble. They did for me when I started thinking about them.

I kept thinking…

Of course I'm fully justified to talk about “budgets” on this photography blog because we're Of course we all know we should have budgets for our personal and business finances. But come on, do we really need a budget?

Based on my own experience of living with and without a budget the answer is an easy “Absolutely, You Need A Budget!”

And please don't run away yet. I know you've tried hard in the past to use a budget. And for different reasons it just didn't work out. That's ok. I've been there. Most of us have.

Spreadsheets are built. Spreadsheets are forgotten. iPhone apps are downloaded. iPhone apps are forgotten.

All I ask is you give it another shot. With the state of the economy, consumer debt, job-insecurity, etc….you owe it to yourself to give it another shot. Not to mention the budgeting tools that are out there today makes creating and maintaining a budget SO much easier then in the past.

If you're already convinced you need a budget but just want to know what tool I recommend, I'll save you the effort of having to scroll to the bottom of this post. The program that gets my full recommendation is You Need A Budget (or YNAB, for short). YNAB wasn't voted Best Personal Finance Tool by Lifehacker Readers for no reason.

Still need to be convinced you need a budget? Let me tell you from experience…

REASON NO. 1 – BANK ACCOUNT BALANCES LEAD TO POOR FINANCIAL DECISIONS

Before YNAB  – Money comes in, you feel rich, so money goes out…and fast. You end up with more month and the end of your money. Credit cards fill in the gap and send you on the death spiral of death. Emergency savings? Ha….no way.

After YNAB – Money comes in, you use your budget to “give your money a job”. Then when it comes time to spend, you let your budget guide your decisions. Savings for rainy days are built into the budget. So you'll see your bank account balance go up up up!

Reason No. 2 – An increase in income (ex. from photography gigs) can have purpose

Before YNAB – You think that all your money problems would go away if only you made more money. More money coming in is a great idea…but if you don't already know how  to manage your money, any extra will be spent just as fast as it's made.

After YNAB – With a budget, you can put any and all income to it's best use. Made a  little extra from a family photo shoot this month? Go into your budget and set that money aside for the new lens you're saving up for. Or maybe you want that money to go towards some of your debt. Either way, your budget is your tool to make your money behave and have purpose.

Reason No. x – You can easily beat your Credit Card company.

Before: Credit Cards let you steal from your future self and with high interest rates consumer debt is running rampant.

After: Instead of cutting up all your credit cards,  try using a budget that will ensure you spend within your means. Then use your credit card for your purchases knowing you'll be able to pay off the charges every single month. So no more adding to the debt, but you still get the convenience of the cards plus whatever points, cash-back, or air miles your card offers.

Reason No. xx – Save Your Marriage

Before: Money fights are one of the leading causes of divorces in North America.

After: Budgets allow couples to discuss money priorities and values, agree on a plan, and then track the results. (Insert link to information about how couples should work a budget together….DR.)  WARNING: Make sure you budget some money every month into “His Guilt Free” and “Hers Guilt Free” categories.  It doesn't have to be much at first, but that freedom will help make the budget stick with everyone.

Reason No. xx – Guilt Free Spending

Before: In my family any purchase over about $70 was considered “major”. Without a budget it was difficult to not feel guilty for spending money. Especially when it brings a family into deeper and deeper debt.

After: Budets allow you to decide how you spend your money. “This, not this” is a common mantra in my houshold. So when an item does make it onto the budget, and the money is saved for whatever it is….when it comes time to buy the item, it is done so with JOY and a sense of WINNING instead of guilt and heaviness. Reason No. xx – You Can Achieve Your Financial Goals Before: Money comes in, money goes out, debt adds up. After: Money

Reason No. xx – It's Not as Hard or Time Consuming As You Think

Before:

After:

Reason No. xx –

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