Why budgeting is important

Essay by c_mcgregor09College, UndergraduateB+, November 2014

download word file, 3 pages 0.0

Jesse Higdem


Composition 2

Finance Essay

Budgeting is a crucial tool to help us succeed in life, or attain our goals. The very basics of economics states we have unlimited wants and needs. A budget helps us attain some of those wants, but with less stress and greater success. The problem, however, is we never stop and look at the grand scheme of things. Most view household finances as not spending more than your paycheck. But finances require more than this simple view or a one page budget sheet. To ensure financial stability we must approach with the correct behavior, advanced budgeting sheets and having set goals.

"We buy things we don't need with money we don't have to impress people we don't like (Ramsey)." Basic household finance is ninety-five percent behavior and five percent know how. More often than not we are buying things we don't really need, and we are basically putting on one expensive show. This is the most important aspect of finances due to the amount of control it has over us. It is tempting to purchase that brand new car; especially since we talk ourselves into buying them. This stems from our instant gratification thought process. We become so use to buying now that we never see how financially damaging it can be. We must lose the concept of, "Well I have a coupon so I have to buy it", and turn to a delayed gratification mindset. Wouldn't it be nice to work towards retiring with eight million dollars? This is the hardest area to improve on when you decide to take the road to financial stability, but budgeting will help us make smarter decisions.

Setting a budget is not something that can be accomplished overnight and should have a great deal of thought...