5 Surprising Benefits of Creating a Financial Budget

Imagine how much happier you would be with a sudden increase of income.

Now imagine yourself having that increase without even having to make more money.

That’s right. You can have more without making more (although that would be nice too!).

But how? What’s the magic formula to get more money without driving for Uber or delivering pizzas after working 40+ hours?

The trick is in the budget—the written plan of what to do with the money you get. John Maxwell said, “A budget is telling your money where to go instead of wondering where it went.” Surprisingly, NOT having money disappear is the financial equivalent of having it appear out of thin air.

No, it’s not abracadabra. It’s wisdom. It’s intentionality. It’s a plan.

Benjamin Franklin said, “Failing to plan is planning to fail.” When we don’t budget, we don’t plan. Therefore, by default, we plan to be broke.

Preparing a budget, however, is planning to have more money than month. In other words, we plan to make it last.

You may be surprised to find that a budget is the key that unlocks the door to the many financial benefits you seek.

Here are five of those benefits you’ll experience:

1. Your Bills Will Get Paid

Have you ever wondered why $2,000 a month never seems to be enough to cover the total cost of your bills? Even when your bills are only $1,900 a month.

When 2000 – 1900 = negative something, we have a problem. That’s what TCI points out in “How to Create a Budget that Works for You.” The math should work. But in real life it doesn’t.

The benefit of a budget, however, is that it can.

Money is obedient. When we tell it what to do before we get it, it listens every time. When we let it decide how it wants to behave, it acts like a two-year-old in a candy store.

The problem is not with the child. It’s with the parent. Likewise, money isn’t bad. But it needs a parent (think budget) to tell it how to act.

When $2,000 dollars are told to go to the $1,900 of bills, they do it every time.

2. You’ll Make Progress Towards Your Long-Term Financial Goals

It’s hard to see the forest when you’re standing in the trees. It’s tough to get out of debt and save for retirement when our income is out of control.

By meeting short-term bills, a budget gives us breathing room to accomplish long-term goals.

“I don’t have enough money to save for retirement” usually means “I haven’t started living on a budget.”

By making one, we will see that we do have something we can use towards our long-term financial freedom.

3. Your Health Will Improve

We don’t want to be behind on our bills. But without a budget, we will be.

This stress affects our emotional life and relationships with others.

We stay awake and worry. We can’t engage in quality relationships because our own lives are a wreck. We’re too stressed out about the light bill that’s going to be due… last week.

A budget puts us at ease. With our financial lives in better shape, the quality of our emotional/relational lives improve as well.

4. Your Income Will Increase

Life has a way of giving us what we can handle. Those who do well as middle managers become upper managers. People who engage their social following grow a bigger following.

Money is no different. When you budget what you have, you will find yourself receiving more.

5. You’ll Experience the Results You’ve Learned About

Knowledge is what you know. Wisdom is what you do with what you know. Developing your financial education is important. That’s where learning how to create a budget comes into play.

But money management is more about behavior than knowledge.

A budget is the bridge between what you do and what you know. It’s the step between learning and living.

By working a budget, you activate what you’ve learned about money. You get real results.

All in all, those who make a budget actually use their money. Those who don’t allow their money to use them instead.