UK Guide to Budgeting
Why is budgeting important?
Money is a tool that enables you to reach your goals in life, but until you know where your money actually goes, you can’t make informed decisions about how to use this tool effectively.
A budget shows you exactly where your money goes and provides a spending plan that lets you save for the things that are important to you.
Budgeting isn’t just about tracking your costs, it should be about setting financial goals and finding ways to meet them.
For most of us, the word “budget” has a negative connotation. Instead of thinking of a budget as financial handcuffs, financial advisers recommend that you think of it as a way to achieve your financial goals.
A budget can help you meet your savings goals. It should also have a mechanism for setting aside money for any savings and investments you plan to make.
A budget helps you to prepare for any emergencies or unexpected expenses that you might otherwise be financially unprepared for.
Importantly, a budget can keep you out of debt or aid your getting out of debt.
While it seems obvious that good financial planning will help you sleep better at night, some experts even claim it can improve a marriage!
Simply put, a budget lets you control your money instead of your money controlling you.