There are a few important reasons to create a budget, hopefully, you’ll seriously consider doing so to improve your personal finances.

1.  Helps Achieve Personal Financial Goals

First, if you have financial goals, as most of us do, you’re going to have a hard time achieving them without a monthly spending plan to help you stay on track.  If your goal is to become debt free, a monthly plan that determines how much money is to be allocated towards debt payments is critical.  Your spending plan or budget also helps avoid over spending. All that over spending takes money away from your personal financial goals such as savings, debt reduction and also inhibits your ability to give.

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2. Is Wise Biblical Stewardship

Second, having a budget is a Biblical principle of Christian Stewardship. God expects us to manage his resources wisely. Over spending, not knowing where you money is going each month and certainly not working to reduce debt or achieve financial freedom isn’t God’s plan for your life.  God desires us to be free to serve him and not have the burden or worries financial bondage brings with it.  If God expects us to be stewards, or managers of his resources, having a plan just insures we’re able to do a better job in managing them.

So then, men ought to regard us as servants of Christ and as those entrusted with the secret things of God. Now it is required that those who have been given a trust must prove faithful (1 Corinthians 4: 1-2)

3.  Reduces Anxiety

You’ve heard of people mention they’re stressed over not having enough money, or anxious about upcoming expenses.  There is often debt that makes the situation even more difficult.  Whether you realize it or not, having a plan reduces anxiety.  Why?  You no longer have to  concerned with how you’re going to meet those future spending needs (the cause of the anxiety) because a plan, or a budget, provides you the opportunity to make decisions about how you’re going to use your money.  At the end of the day, it’s your choice as to how you’re going to spend the money.  So, creating a purpose for every dollar at the beginning of the month is the key to reducing stress and money issues.

4.  Improves Communication in Your Marriage

A budget can also serve as a communication tool and a way to insure both you and your spouse are on the same page with how money is going to be spent.  Have you ever been in the situation where both you and your spouse unexpectedly spent a large sum of money without each other knowing about it?  It might even have caused you to overdraw your checking account.  This often occurs because there isn’t a plan in place in which you both create together and communicate about every month.

5.  Sets a Good Example

Finally, as your children get older they may have the opportunity to participate in the family finances.  After all, money doesn’t grow on trees and they need to start learning that from an early age.  One of these days you may want to sit down with your teenager (or even younger child) to walk them through your plan.  Show them how you save and give money.  And definitely show them you have limited money for entertainment purposes.

I hope you consider these reasons important enough to establish a budget.  Can you think of other reasons?

Photo credit: kenteegardin