How a Budget Can Improve Your Life

The following is a guest blog post:

Let’s be honest here; budgeting isn’t on anyone’s list of the top ten most exciting activities. Some even find creating a budget to be oppressing and suffocating. Is it? Are budgets designed only to confine you, or can they set you free, allowing you to live the life that you really want?

Consider Your Goals

What are your goals in life? What do you dream of doing? Do you want to buy a car or a house? Do you want to travel all over the world? These are all honorable goals, and they all have one thing in common; to accomplish them, you need money. Here is where your budget comes in.

Increase Your Credit Score

You can save up to accomplish some goals; for others, you need credit. Whenever credit is required, so is a good credit score. If your credit score is in bad shape, now is the time to use your budget to improve it. With a budget, you can pay your bills on time and pay off your debts. This is an excellent way to boost that credit score!

Meanwhile, if an emergency arises and you have no savings, think about getting a quick loan. Online lenders don’t check your credit report, they merely do a bank account verification and validate that you have a steady job. Once your credit score has improved, you will have access to bank loans, credit cards and lines of credit, all at lower interest rate than a trusted payday loan. Remember to use these responsibly, and make sure the payments fit within your budget.

Save Up

Now that you’ve established your goals and increased your credit score, start putting money aside in a savings account. You can schedule routine withdrawals from your main account to a savings account either per pay, week or month. You can also try simple tricks such as tossing any loose change in a jar. Others use the 52-week challenge where they save $1 the first week, $2 the second, up to $52 on the 52nd week. You save $1,378 over the course of a year by using this method.

Cutting down on take-out food can also leave you with extra money at the end of the month. Your budget will help you determine the best way for you to save, according to your needs and lifestyle.

Live the Life

Once you get into the habit of saving, you’ll be able to reach your goals without experiencing financial hardship. Before you know it, you’ll have a new set of goals to reach, for example investing in your future, and will be experiencing the life you’ve always wanted!

2 thoughts on “How a Budget Can Improve Your Life

  1. I think there is some confusion between budgeting and expense reporting. Very few people do budgeting. It actually requires planning ahead – what you going to spend. I only call it budget myself as I have an annual cap on the spent.

    I have been doing expense reporting for the past 10 years:
    http://www.niterainbow.com/search/label/Family%20Budget

    It can be an exciting and insightful thing to do, as provides a lot of insights. What you spend, what do you need for retirement, how are your habits evolving.
    Financial Independence recently posted…Are additional payments on your mortgage worth it?My Profile

    • Hi FI,

      Well said. Bottom line, I think budgeting goes hand in hand with fiscal discipline. No discipline, no budget. It simply won’t work. You have to live by the rules you set for yourself.

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