5 Signs You Need a Budget

5 Signs You Need a Budget

Talking about money can be uncomfortable. For some, the word budget comes with a bit of anxiety; the world of credits, debits, income and expenses is completely foreign. The thought of recording and categorizing every single transaction feels overwhelming to you. Like anything, starting is the most difficult part. But once the habit is built, we begin to reap all of the rewards. Taking ownership of our spending habits is empowering and gives us control of our money. So, how do we know if we need a budget? It seems like most of the time there is enough money to pay for the things we need, so maybe a budget isn’t necessary? Well, here are 5 signs you need a budget:

 

The Easiest Budget You’ll Ever Follow

 

Unexpected Expenses Cause You Stress

Your Credit Card is Your BFF

You Can’t Afford the Vacation You Want

You Can’t Remember the Last Time You Check Your Bank Statements

You Don’t Put Money Away for Retirement

 

Unexpected Expenses Cause You Stress

Your vehicle has a flat tire. Your dishwasher needs replacing. You shrunk you’re new sweater. Your pet needs new medication. The list of unexpected expenses is endless. One of the 5 signs you need a budget is when these expenses come up and you feel a pit in your stomach not knowing how you will pay for it.

Instead of relying on friends or family to loan you the money, or putting it on a credit card, a budget would ensure you could save for such an occasion. Now, a budget may not prepare you for everything but contributing to a ‘rainy day’ fund will alleviate some of the worry on those unwanted rainy days. Start small, put away $20 each week and start your rainy day fund.

 

Your Credit Card is Your BFF

Do you find that you blindly hand over your credit card not worried about how your going to pay it back? Thinking, “I’ll have enough and if not, I’ll sort that out later”. If using your credit card feels like being wrapped up in a security blanket, it’s time to take off the blanket—this is one of the 5 signs you need a budget.

Yes, building credit is important and helps us to make large ticket item purchases like vehicles and houses, but if you use your credit card as an avoidance tactic of what you can or can’t afford, then it’s time to tighten the purse strings. Keep in mind having too much credit is also bad for your credit score.

 

The Easiest Budget You’ll Ever Follow

 

You Can’t Afford the Vacation You Want

Dreaming of a summer road trip in the mountains? Or how about a trip to Europe to drink some wine in Italy? Maybe you just want to chill on a beach in Thailand? Does vacation time always come around but when you look at buying the plane ticket or booking your hotel stay it always seems too expensive? One of the 5 signs you need a budget is when year after year you can’t seem to afford the vacation you are looking for.

Whatever your idea of a dream vacation is, budgeting can help you get there. Learning to put aside small amounts each month will be a habit that will one day take you on that trip! Maybe that odd job you did on the weekend or tips from serving go straight into a savings jar instead of spent on a meal out. Soon enough you will find yourself on that beach, climbing that mountain, or wandering the streets of an ancient city.

 

You Can’t Remember the Last Time You Check Your Bank Statements

Whether you get your statements by email or old school mail, taking a look your bank statement feels like something that will put you to sleep. And while it may, they are important to check. Not knowing what is coming in and going out is one of the 5 signs you need a budget…It’s a major sign!

If you have no idea where you stand, how can you know where you are headed? There may be extra deposits you aren’t aware of or expenses that are incorrect. The benefit of going through these transactions a couple times a month can be vital in knowing what is going on and to ensure there is no activity that isn’t yours. Sprout is developing a Financial Wellness App that will let you know exactly how much you can safely spend, give us your email below and we’ll keep you posted, stay tuned!

 

You Don’t Put Money Away for Retirement

If saving and investing is something that always gets bumped to the bottom of the to-do list, this is final one of the 5 signs you need a budget. There is a misconception that to invest in some form of long-term savings you need a great deal of money, when really your greatest ally is time. To start, it isn’t how much you start with that is important, it’s just that you start.

Budgeting is a great way to know how much you have left over and what portion of that can be invested in your future. Even starting with $50 / month can make a huge difference down the road. Think of it like a bill or a tax, you just have to pay it.

 

 

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If any of these 5 signs you need a budget ring true for you, it may be time to consider creating a budget. Unsure of where to start? Check out last week’s blog post on the 50-20-30 Rule for simple budgeting. The 50-20-30 Rule really helps because it is perfect for the person who has never budgeted before. It’s simple, it doesn’t require a bunch of categories to keep track of and it tells you exactly where you need to cut back and where your money should be going. We’ve also created a simple downloadable worksheet to help you out! It’s available at the bottom of the post 50-20-30 Rule for simple budgeting.

Remember, budgeting is a skill and with time it gets easier. It takes practice and tweaking, so starting is the greatest hurdle. There is no doubt that once you do that you will become more aware of where your dollar is taking you!

 

“Financial freedom is a mental, emotional & educational process. ”
― Robert Kiyosaki

 

Comment below with some other signs you think might tell you, you need a budget. Comment Below.

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