Budgets are a big deal. When you are not in control of your money, your money gets out of control. Imagine that! On the other hand, when you are in control of your money, it’s like giving yourself a raise. You get to tell your money what you want it to do for you, which means you can do some pretty amazing things for your business, your clients, your team, and yes, even yourself!
Here are 5 reasons to have a budget:
1. A Budget Helps You Keep Your Eye on the Prize
A budget helps you figure out your long-term goals and work towards them. It forces you to map out your goals, save your money, keep track of your progress, and make your dreams a reality. What “prize” do you have your eye on? (i.e. what concrete outcome are you working toward?)2. A Budget Helps Ensure You Don’t Spend Money You Don’t Have
Far too many consumers spend money they don’t have—and we owe it all to credit cards. However, if you create and stick to a budget, you’ll never find yourself in this awful position. You’ll know exactly how much money you earn, how much you can afford to spend each month, and how much you need to save. How much do you currently earn per month? ______________________ How much do you currently spend per month? _____________________ What do you have left over? ____________________________________3. A Budget Helps Shed Light on Bad Spending Habits
Building a budget forces you to take a close look at your spending habits. You may notice that you’re spending money on things you don’t need. Take a look at your spending habits and take note if you are spending more than necessary in certain areas. Where can you improve?4. A Budget Helps prepare for retirement
As important as it is to spend your money wisely today, saving is also critical for your future. It’s important to build investment contributions into your budget. If you set aside a portion of your earnings each month to contribute to your IRA, 401(k) or other retirement funds, you’ll eventually build a nice nest egg. What are you currently doing to prepare for retirement? What would you like to start doing to prepare for retirement?5. A Budget Helps You Prepare for Emergencies
When you get laid off, become sick or injured, go through a divorce, or have a death in the family, it can lead to some serious financial turmoil. Your budget should include an emergency fund that consists of at least three to six months worth of living expenses. This extra money will ensure that you don’t spiral into the depths of debt after a life crisis. Don’t try to dump the majority of your paycheck into your emergency fund right away. Build it into your budget, set realistic goals and start small. What do I currently have set aside for emergencies? _________________________ How much do I need to save up to set aside for emergencies? __________________ NOTE: You can calculate this by multiplying your monthly expenses x 3, or x 6 for a more robust emergency fund
Start Now
It’s not enough to know a budget is necessary. In fact, you probably already know that, but it just sounds boring…so you may avoid getting started. “Plus,” you may think, “I’m not really sure how to start anyway.” Don’t you worry, I’ve got you covered 🙂 My Budget/Cash Flow Projection Spreadsheet has been known to transform therapy practices (at least according to my clients). Some have taken my finance course and said this one piece was the tool/concept that made the most direct financial impact. It is truly transformative to know your numbers, and to have a place to plug them in! You can access the Budget/Cash Flow Projection Spreadsheet here. I’ve even got a video tutorial on how to use the spreadsheet here: Cash Projection Spreadsheet – Video Tutorial Wishing you all the best so you can go out and make a real Impact!