The Brilliance of Budgeting

February 13, 2024

The Brilliance of Budgeting

The word, budget, can induce fear and anxiety for some people. It could be the notion that budgets are meant to restrict spending. It might feel like a tedious, rigid, time-consuming process to others. It could be a fear of losing flexibility in their spending patterns. Maybe they’ll have to put off purchasing that new car or the summer vacation. If all those things were true, it would be easy to see why so many people might avoid starting the process altogether. However, I would argue that creating a budget and being disciplined in the process creates more freedom and flexibility than the alternative. It can be a tremendous vehicle to accomplish long-term financial goals. Creating a budget can offer so many benefits. I have outlined a few below.

Financial Control

If you understand where you spend your money, you can set yourself up to make informed decisions. It’s not about spending restrictions but about empowering you to spend money on the things that matter to you.

Stress Reduction

According to the American Psychological Association Survey, 72% of Americans report feeling stressed about money.1 The process of creating and maintaining a budget could lead to lower stress levels. Once you have a firm understanding of your income and expenses, you’ll likely find room in your budget to increase savings, pay off debt, or get that emergency fund finally set up.

Improved Communication

In families and partnerships, effective communication should be a high priority. According to the National Library of Medicine, 38% of divorces are due to financial problems2. Setting aside time to talk through the family finances could improve transparency and build trust.

Increased Savings and reduction in debt

The typical downstream effect of a budget is increased savings, debt reduction, and progress toward financial goals. By having a firm grasp on your finances, you’ll likely find ways to reduce frivolous spending and put those dollars to better use.

Where to Start?

It could be as simple as taking time to write down your income and fixed expenses. I’m a big fan of leveraging technology when it comes to creating and managing a budget. There are some wonderful tools on the market that can help you through the process and save you valuable time. Another method that certainly helps is to seek professional help through a financial advisor. If you need help thinking through a budget, or getting a better handle on your finances, reach out to our team. We would love to help!


Written by:  Foster Group, Kadin White CFP ChFC




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