Managing Personal Finances
The Benefits of Budgeting
When going on a road trip, most people have a map which tells them how to get from point A to point B. The map is important, because it tells you how to get to your desired destination. A well developed budget is just like a map to help you reach your financial goals. You start at point A, and the budget helps you go the distance get to point B.
Having a budget can be very beneficial to get the hardship of debt off of your plate. Debt is money that is owed by one person to another person, or company. Many people these days struggle with the burden of debt. The Pew Charitable Trusts reported in 2015 that 80% of Americans were in debt. The median is almost $68,000 for Americans, talk about stressful! Debt can take many different forms, here are just a few:
- Credit Card
- Medical Bills
- Personal Loans
- Car Loan
- Bank Overdraft Charges
- Student Loan
A well-crafted budget could help you create a savings. In this context savings means money that a person has saved, usually through a financial institution, but not always. Having a savings is critical, and often overlooked. You never know when lightning is going to strike, the car is going to break down, or you suddenly need to have an emergency appendectomy. The boy scouts have a motto, always be prepared. We don’t always know what is coming our way in life, but a little foresight and preparedness can help. Saving a small emergency fund could mean the difference between saving the day, or total disaster. Here are a few different types of events you could save for:
- Car Repairs
- Housing Repairs
- Medical Costs
- Unexpected Unemployment
When a person is weighed down by their financial situation, it can cause a lot of stress and anxiety. Stress and anxiety can make it hard to function in life. Feeling the overwhelming pressure can be debilitating for some people. Stress and anxiety can also manifest in the following ways:
- Heart attack
- High Blood pressure
- Gastric Conditions, such as stomach ulcers
- Substance abuse
- Eating disorders, weight loss/ or weight gain
Financial stress and anxiety can be curbed by having a properly developed budget in place. A budget can help you manage your monthly spending. Your budget can even help you get out of debt, if that is one of your goals.
Financial strain can affect more than just your physical health; it can affect your relationships also. When you’re stressed out, that always has a way of leaking into your relationships with your spouse, family, and friends. A major cause of divorce in America is related to financial issues. When financial stress is at the forefront of your mind, it can cause you to be distant, and irritable towards your loved ones. Sometimes we have to borrow money from a loved one, which can add even more tension to an already strained relationship. Not only are you trying to get yourself back to level, financially, but having to figure out how to pay your loved one back.
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