Why You Need a Personal Budget

One of the hardest things to do financially is to follow a budget.  There are so many unforeseeable expenses and temptations that it seems like it is nearly impossible to stay within a specific limit.  While it is difficult, it is not impossible.  For those who are serious about their financial future, it is completely necessary.

Second Step to Financial Independence

Creating an effective personal budget and sticking to it is the second step to becoming financially independent; the first is investing in your financial education.  To paraphrase a recommended author, how can you expect to control your finances once you have REAL money if you can't do so with the money you have now?  You won't.  This is one of the main reasons why so many lottery winners and multi-million dollar entertainers end up broke.  They never learned to control their finances and they squandered it once they became rich.

Personal Budget: Know How Much You Have

Don't be one of the many people who would rather bury their head in the sand than know exactly how much money they have.  Knowing how much money you have available will help you resist those temptations that would happily separate you from your cash.  This knowledge will make it harder for you to fork over money for those frivolous things you never gave much thought to before.  A solid personal budget will provide you with this insight and help you stay on track.

Personal Budgets Save Money

That is the simple truth.  If you have saving as part of your budget, your money will seem to build on it's own.  You will see payday in a different light.  The paycheck will mean more to you because of the knowledge that it is building on your pile of gold.  If your pile of gold is kept in a high interest account or another investment, that money will begin to work for you.  Money that works for you makes more money for you.  That's always a good thing.