In order to create motivation for a certain act, it’s important to discern its benefits. At times, the prospective reward may not seem to be in proportion to the work required, but if you can begin to identify long-term benefits in addition to immediate gains, you are on your way to understanding and defining your ‘why’; your purpose for working towards a specific goal.
Some would argue that your ‘why’ is the most important part, and when you know your purpose, the ‘how’ pretty much takes care of itself.
The subject of budgeting has been covered on the blog before. Now that you know how to make a budget, let’s take a look at the potential incentives for following through on your financial plan.
1. It Increases Your Self-Image
For many of the reasons that will be discussed in more detail, making a budget will ultimately increase your self-image.
There are a lot of things that people don’t do, and even more things that people don’t do consistently. When you’ve developed the positive habit of creating a budget and sticking to it, your personal confidence will blossom.
2. It Helps You To Be More Intentional
What is the power of intention?
When you intend to do something and you actually do it, you are strengthening your ability to honor your intentions. When you honor your intentions, you are loving yourself. Love is one of the most powerful forces in the world.
Intention – when it is directed intelligently – becomes personal power.
3. It Keeps You Focused On Your Goals
Your budget will help you to stay focused on your financial goals. When your vision is strong enough and your dream is big enough, making difficult decisions in the short term won’t seem like big sacrifices (i.e. not going to a movie every Friday night).
After all, one of the major reasons for having a budget is to accomplish goals that are important to you.
4. It Helps You To Be More Aware Of Your Financial Situation
Some people simply don’t know what is going on with their money. If you ever intend to amass a fortune, you will have to get a better sense of where your money is going, especially early on.
Being aware of your finances helps you to make decisions in the short term that will help you meet your goals in the long run.
5. It Helps You To Save More
Budgeting will help you to be more organized. When you are more organized, you will be able to save more money, as you are more aware of your financial standing.
When you have enough money coming in, you can allocate more of your income to your savings. Assigning a pre-determined amount for your savings is one of the key components to making an effective budget.
6. It Helps You To Pay Off Debt
If you are organized, you will be able to save more. Likewise, if you are disciplined with your spending, you will be able to pay off debt more quickly.
In some cases, it may be beneficial to pay off debt (especially consumer debt) as quickly as you can, and once the debt is paid down, assign the same amount to your savings account, which would then grow very quickly.
7. It Helps You To Plan
If you know you are going on vacation in three months, you know that you will need to save money for your trip. When expenses are planned, they are far less likely to wreak havoc on your financial life.
This is what budgeting is all about. It’s about planning.
8. It Betters Your Relationships
Money can be the source of many disagreements and disputes with your significant other.
When you have a financial plan that you are intentionally following, you can improve your relationship by working towards a common goal.
9. It Reveals Unnecessary Spending
If you want to cut back on spending, a budget will reveal to you where you could be spending less. If you want to save more money, it is crucial to reduce spending.
Cutting back on needless expenses will help you to get back on track financially.
10. It Reduces Stress
Financial pressures can stifle your creativity and your mental energies. When you are under less stress, you can think more clearly and make better decisions.
Money is far too big of a concern for many people, and their health and relationships suffer as result. Take care of your financial life, and you will have more time for what’s really important to you.
11. It Builds Positive Habits
Positive habits aren’t always easy to cultivate. Though creating a budget is just one way to reinforce good habits in your life, it can quickly snowball into other benefits.
This is because finances tend to have a symbiotic effect on one’s life. When you aren’t worried about money, you will reduce your stress levels. When you aren’t stressed, inspiration comes easily.