5 Things that Happen When You Budget Poorly
Monday, June 30, 2014, 1:00 AM | Leave Comment
It may not be a glorious task, but planning a budget today can make all the difference in the quality of your life tomorrow. But because many people feel imprisoned at the idea of delegating where each dollar should go, they avoid budgets as if they were bubonic, preferring instead to live off of impulse and “feeling”. And while this faux notion of freedom is good, the actuality of freedom is better.
George Abakhan from Abakhan & Associates Inc. says that the inability to budget, save money and control expenses is one of the most common root causes for personal bankruptcy.
If you want to achieve financial freedom in the long-term, let these five side effects of failing to budget serve as an incentive for why it’s worth planning today.
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Your Phone Never Stops Ringing
If you think the Energizer Bunny is relentless, then you haven’t met a bill collector. One late or skipped payment can lead to an endless stream of phone calls. They call on weekends. They call at night. They call from different numbers in order to fool the caller ID.
And should you ever pick up the phone, you are sure to find yourself in a mock Spanish Inquisition with a rude and hostile interrogator.
A budget can help you never have to learn how to play over the phone hide-and-seek, because it is a game you will almost never win.
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Your Bank Account Becomes a Bill
Monthly maintenance fees and overdraft fees are no joke, and depending on whom you bank with, they can accrue in an astronomical way.
When the bank account that is supposed to help you build money starts to take it away, then it is fair to say that something has gone drastically wrong.
Budgeting will help avoid turning your bank account into a monthly bill, and will take away that lurking negative sign that has a way of appearing at the worst possible moments.
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You Overcommit
When the entirety of your financial outlook is not readily producible on paper to serve as a glaring reminder, you often exercise short term memory when it comes to your monthly expenses and commitments.
And before you know it, you are suddenly mistaking the extra jingle of change in your pocket as discretionary income to be used for a new credit card payment, rather than to be allocated to an already accrued bill or expense.
Not to mention the sometimes invisible but always present necessaries that we chose to forget since they never come with a due date, such as food and gas.
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Unprepared for Emergencies
Unfortunately, few things in life are predictable and living without a budget means you will be caught off guard when the unforeseeable strikes.
Budgeting prepares you to set aside a little each month for savings, and to therefore have a cushion should the dramedy of life deal you a tough one.
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Dreams Stay Dreams
Nobody wants to dream forever. We strive and hope to one day turn our dreams of home ownership, or starting a business, or sending our kids to college into a reality.
And while it takes stick-to-itiveness and perseverance to make any dream tangible, it also takes financial responsibility.
Having a budget will allow you take a truthful assessment of where you are and it will prepare you to take the little steps to get where you want to be.
Budgeting may sound like the chore of CEOs and CFOs, but it is something everyone and anyone should do. No matter how much money you make, it is always worth forming a budget.
Seeing as no captain goes to sea without a map, so should no one navigate the torrents of this life without a budget to guide them home.
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