The expression monthly budget was always very terrifying to me. I had no idea of how to prepare a monthly budget and much less idea of how to follow it! Truth is, everyone needs to plan their monthly budget, but no one wants to get to it.
Let me tell you something… A little over two years ago, my husband and I had probably over 60k in credit card debt plus a car payment and a mortgage payment. We didn’t even talk about a monthly budget.
Deep inside we knew that we were spending much more than what we were making. How could we not be terrified about preparing a budget?
Of course we were terrified. That’s obvious. We didn’t wanna see the truth and we didn’t wanna deal with it.
But the thing is, the longer you postpone the truth, the more debt you create and the harder it becomes to pay it off!
I will share with you, from someone who was in a frightening financial place, 5 reasons why you need to write a monthly budget!
A monthly budget will tell you the truth
Yes yes yes!!! As hard as it can be, a monthly budget will tell you the truth. Once you write everything down, from mortgage or rent payment to the basics, it will show you how much you’ve been spending and if your income covers it or not.
Knowing this huge truth will finally put you in control of your finances! I won’t say the first few months of planning a budget will be easy because they won’t. You’re not used to writing your expenses down, and because of that, the first few times you do it, you’ll skip a lot of them.
Your written plan will have nothing to do with your spending! You’ll exceed your planned budget by a lot, but it’s ok. Just keep doing it every month.
When a baby is learning how to stand up on their own, they fall and they get back up again. They start taking their first steps, then they fall again, and they get back up. Finally, they start walking and soon running. Can you imagine if they’d given up and stopped trying the first time they fell? They’d still be sitting on the floor. It’s the same with your budget. The more you practice, the more you gain control over it!
A monthly budget will make you the boss of your finances, not your finances the boss of you.
When you don’t have a budget or any idea of how much you have and how much you’re spending, you begin to check your bank account every time you need to spend.
You keep checking your account balance throughout the day as if you’re waiting for some money to miraculously drop in your account. Friend, you need a plan! You need to know when your money comes in, how much comes in and where it’s gonna go.
Don’t let your money control you. Don’t let your money force you to live your life as a slave. Take control today!
A monthly budget is your passport to a healthy financial life
When you write down your income and expenses, you get to have an overview of what’s actually going on. Seeing the plan all laid out, right in front of you, will allow you to visualize and identify what you can eliminate.
The budget will show you where you can save more, where you can spend more, where you shouldn’t be spending at all.
When my husband and I made our first budget, we realized we ate out way more than we could actually afford.
Now we make sure we eat out once a week or in special occasions, like a date or other events. This change alone has allowed us to save at least $150+ per month.
Another big change we made is that we set aside a monthly budget for groceries. We used to spend as much as we wanted, without even knowing how much we could truly afford.
You can read all about our incredibly powerful tips on how to save on groceries, here! Implementing those strategies has allowed us to save big each month!
Having a monthly budget and gaining control over your money is the only way you will be able to make an execution plan and follow through to get where you want financially!
A monthly budget gives every dollar you spend a purpose
Have you ever checked your bank account only to realize you made extra money? What’s the first thought that came to your mind?
I bet you found something to spend that money with, right? Maybe you had credit card debt you needed to pay, but since it was extra money, you just decided to go on a trip. Or maybe you decided to go out with a friend.
It probably didn’t even occur to you that you could spend that money to pay some of your debt and walk even closer towards financial freedom. When you prepare your monthly budget, you become aware of the money that’s coming in and the bills and debt you have to pay.
If you give every single dollar that comes in a purpose, you won’t spend that extra money in the first thing that comes to your mind.
A monthly budget actually allows you to spend money
When we didn’t make budgets yet, we’d always feel like we couldn’t afford birthday presents for our friends, trips, or anything that came up unexpectedly.
We didn’t know why. All we knew is that we didn’t have the money to do any of those things. The thing is… we spent our money without no control at all. We over spent on groceries, on clothing, on restaurants. Planning and saving were two things we didn’t do. We just went along, we let our money rule us.
Once we started making a plan, we got clarity on what we were doing wrong. We started giving every dollar a purpose. We started determining how much we wanted to spend on each category. By doing this, we were able to reduce our expenses in almost every category of the budget. This allowed us to make room to spend more on other interests we had.
You see, making a monthly budget is not only about cutting your expenses, but also about being in control and prioritizing your spending!
Now, I’d love to hear in the comments if you make a monthly budget and how it’s helped you be in control of your finances!