Budgeting is an incredibly important pillar of personal finance, and unfortunately, it’s too often overlooked. Only about half of Canadians actually have and maintain a monthly budget (FCEC, 2019). Unsurprisingly, it’s the people that do budget who are able to manage their money better in every aspect of their lives. Everyone should have a budget, regardless of your income or where you are in your life. Creating and sticking with a budget will allow you to take control of your financial situation and help you achieve your long-term goals.
What is a Budget?
A budget, simply speaking, is a way to organize and allocate your money. It’s as simple as tracking how much you make, and tracking how much you spend, so that you can stay financially responsible and work on achieving your financial aspirations. Whether you want to buy a house or go on a vacation next year, budgeting will help you get there. Having a budget is extremely helpful in not only helping you save for your financial goals but for saving up an emergency fund. Everyone should have a safety net of 3-6 months of their expenses in case of an emergency. If you lose your job, or if your car breaks down, having that safety net will come in extremely handy. Having a safety net will also prevent you from using your credit card to make unexpected purchases, which will help you avoid credit card debt. Budgeting helps you to not spend the money you don’t have, and spend the money you do have wisely.
Students especially benefit from making and sticking with a budget while in school. When you’re first starting to manage your own money, it can be really overwhelming, but having a budget can really help keep you on track. Staying organized and on top of your finances will alleviate some of the stress that students are facing. If you are someone who is prone to overspending, it can make paying basic expenses like tuition and rent really challenging, and stressful. Having a budget will help keep unnecessary purchases low, and helps minimize student debt. It will set you up for success for the rest of your life! Budgeting puts you in control of your own money, can help you save money, and can help you stop overspending. Budgeting is something without a doubt that all students should start doing --- and learn how to manage their money along the way!
Seriously, you need a Budget!
Budgeting will give you control of your personal finances, and will help you lead a more fulfilling life. It’s not just about restricting your spending and no longer doing all the things you love. It’s about strategically allocating your money so that you don’t feel bad about spending your money, in fact, budgeting helps you enjoy your money more. You won’t feel panicked or guilty about treating yourself once in a while, in fact, you’ll feel good about it, because you’ll know that you can afford it. Frankly, there is nothing more useful and rewarding in the long-term than making yourself a budget right now. Why haven’t you made yourself a budget yet? Learn how to set up your budget here.