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4 Reasons Why You Need To Keep A Household Budget


We work hard to earn a living. We should make sure we spend the money we bring home wisely. That’s where a household budget comes in. It is a good tool to see at a glance what we have coming in, what is going out (essentially, what that money is paying for) and if there’s anything left at the end of the month.






Before we dive into exactly what a budget can do for us, let’s consider for a minute what will happen if we’re not tracking income and expenses. We may end up spending more than we are making in a given month. Over time, that can put us into some pretty hot water financially. We may also spend a lot more than we’d like to believe on things like eating out, going to the movies or new clothes.

Having a budget gives us more control over where we want to really spend our hard earned cash. Maybe that’s dinner and a movie, but maybe it isn’t. Wouldn’t it be nice to have an actual choice? So why do do need to keep a household budget?

It Tracks Where Your Money Is Going
A budget simply tracks your money. You record where the money comes from each month (your income) and then write out everything you spend it on, starting with your regular monthly bills like rent, car payments, utility bills etc. What’s left after all the bills are paid is your discretional income.

Helps You Identify Things You Waste Money On
Having it all in front of you in black and white helps you identify things you’re wasting your money on. It makes you reconsider if you really want to spend well over N15,000 a month on Cable TV or N5,000 on your large cell phone plan. Or how about that yearly magazine subscription to something you no longer read? Go through your expenses and re-evaluate if this is REALLY how you want to spend your pay check.
  
Allows You To Be Proactive About Savings
Saving money without a budget is hard. We go in with the best of intentions at the beginning of the month, but somehow there isn’t anything left at the end of the month. A budget gives you a chance to be a bit more proactive. Set aside some money for savings at the beginning of the month, even if it’s just 20 percent of your income. Put it in the budget as a regular expense, just like you do with your other urgent bills. If you need to, open a separate savings account so you’re not tempted to spend it.

Ensures You’re Not Spending More Than You’re Making
Most importantly, your budget will keep you on track and help you make sure you’re not spending more than you’re making. And I don’t have to tell you that that’s pretty important for your financial well-being.
  

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