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You Need a Personal Budget

Updated on September 24, 2012

Why You Need a Personal Budget

If you think you know where all your money goes and that you do not need it all written down to keep up with it, I challenge you. Try to keep track of every penny you spend for one whole month. You will quickly see the need for a personal budget, as you notice all the streams of money leaving your pockets.

You may be shocked at what all the tiny expenses add up to, even in just your personal budget. Take the total you spent on just one unnecessary item for the month, multiply it by 12 for the months in a year, and then the result by 5 to represent 5 years.

That is how much you could have saved and drawn interest on in just five years. That is the very reason all of us need to make a personal budget. If we can get control of the small expenses that are really not important for the quality of our lives, we can enjoy better financial security.

In personal finance budgeting the little things are very important. Cutting down what you spend on lunch by a few dollars a day might save you $15 a week. That makes for $60 a month, and eventually over $3500 in five years. That money could have been on your savings account earning a healthy interest for the whole time.

That was only one place to save money in your daily living, and you were not forced to part from anything important. There are a lot of similar places to cut expenses, if you only spend some time to look for them when developing a personal budget plan. You can save on even the most necessary items, like a personal computer, by looking at the price and not only the quality.

Begin to develop a personal budget by setting some specific long and short term goals for yourself. Search for something that is important to you, and needs financing. Set both sort and long term goals, so there is always something to remember and keep your budget on mind.

If you want to be able to make a down payment on the house, or start a college fund for your kids; buy a sports car, or take a vacation to the Carribean - anything really - then that can be your goal. That goal can be your objective and the reason you need to develop a personal budget.

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    • midnightbliss profile image

      Haydee Anderson 

      9 years ago from Hermosa Beach

      motivating hub, I do agree that keeping track of our expenses is really important and helpful in budgeting for in that way we can have a claer view of our spendings and make revicions the next time if necessary

    • moneymatters101 profile image

      moneymatters101 

      10 years ago

      Great hub. I think alot of people need to start with the basics first. If you understand it inside and out the better off you are. I think everyone is on information overload when it comes to finances.

      Budgeting is a great tool!

      I am now on a mission to save as many people as I can get out of debt. With valuabe information! You might want to join me! you sound like you know your stuff!

      Thanks for your hub.

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