The road to financial freedom: Budget and its benefit

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(Edited)
It is a known truth that budget sucks and I totally agree.
I have had times when i have had to choose between having a budget and just being prudent without a budget and I chose not to have a budget. Like I said in my previous post, being financially free requires a lot of discipline and determination. You don’t do things because you like to do them, you do things because it is what is required of you. I once asked myself if there is any company that became successful without implementing a budget system. If I had seen one, I would probably have followed them but I can proudly tell you that all successful company had a budget. Budgeting is one of those weapons you need to have in your arsenal in order for you to move forward on your way to financial freedom

What is a budget?

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I like to start most of my article with the dictionary meaning of a word. According to my dictionary, a budget is “an itemized summary of intended expenditure usually coupled with expected revenue”. This goes to say that a budget must contain expenses and this expenses must be matched with the income being gotten.
Investopedia defines a budget as an estimation of income and expenses over a given period of time and is usually compiled and re-evaluated on a periodic basis. This means that you know what comes in and what goes out in terms of your finances and then you draw up an estimate. That estimate is a budget. I like to look at a budget as a defined thing and not an estimate. A budget could be drawn on a daily basis, monthly or yearly basis.
Most times a lot of people give different reasons why they can’t do a budget or why they can adhere to the budget. Personally, I feel budgets are too restricting and this makes it hard for me to follow. Many a times, you just get tired and just tell yourself things like a man needs a break. For the past three months, I have been sending ten percent of my income to a fixed account. Do you think this has been easy? I can tell you that this has been one of the hardest times for me but a man got to do what to do what a man has to do..
Other reasons people give include the complex nature of budget. You have to calculate every single expense and all your income. Then the time required to draw a meaningful budget is so much. Some go as far as saying that budget doesn’t work and it just makes you feel bad after it did not work. Like I said the road to financial freedom is not an easy one, so get yourself together and embrace budgeting.

If you are going to be financially free, you have to know where your money goes into.

Benefits of Budgeting

I like to most times see what I stand to gain before embarking on most things I do. Asides, from the fact that budgeting is required to make you financially free, it also has other benefits.
People who are financially free make money work for them. However can something work for you, if you don’t have control over it? One benefit of budgeting is the control it gives you over your money. You are able to determine where you want your money to go and where you don’t want it to. This in turn helps with making record keeping a lot easier.
If you are going to embark on the journey to financial freedom, you must find a way to track your progress (more like an indicator) to see how far you have gone. Budgeting helps you with tracking your progress towards your financial goal. When you have a record of how your money is being spent, you would be able to see where you can divert funds from to make you move faster on your way to financial freedom. I used to be a game addict, I spent a lot on playing games. When I started budgeting, I discovered this and decided to divert all this money to paying my debts and yes I have been able to reduce my debt to a substantial amount.
Another important benefits is the fact that budgeting help you to make future plans on the best way to use your money.

My next post will be on types of budget and easy ways to make a budget.

Thank you for reading.


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Lack of budgeting is the start to large debt

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Very true... and once you are in debts, financial freedom becomes an illusion

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This is such a succinct and precise way to put it...And is completely correct. They should teach this stuff in schools around the world, the value of money, budgeting and other financial matters, however it is an area that is usually neglected, even by many parents who probably never learned it in the first place.

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No truer words

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I have always worked off a budget as it is the best way, in my opinion and experience, to meet my financial commitments, ensure that my funds are going to the essential areas prior to non-essential and to planning for the future. Financial freedom is a fast-disappearing concept in this society I think, however failure to budget will make life much more difficult for a person. This is a good post. Thank you.

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Very true... thank you for stopping by

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