5 surprising benefits a budget delivers -

Who wants to budget? Nobody! No one likes taking a good hard look at the money going out versus the money coming in. When expenses run up, people just add to their credit card balances and ignore the high interest. But using a budget does lots more than cut credit card interest. Surprisingly, a budget helps you: 1. Meet all your financial needs. A budget lets you fine tune spending to meet all needs: short-term (monthly bills and groceries); mid-term (that summer vacation); and long-term (home down payment, college, retirement). A budget shows the expenses you can't avoid (utility bills) and those you can postpone (another dinner out), so you can cut short-term spending to meet long-term goals. 2. Cut waste. Let's say your budget shows you spend $800 a month on food. But that includes coffee on the way to work, soda from a vending machine, and a sports drink at the gym. Over the month, this adds up to a big chunk. You can cut 75% of it with coffee from home, soda and sports drinks from the supermarket, and a refillable water bottle. Without a budget, you don't know what you're spending, so you can't find the waste. 3. Hit goals. To reach a financial goal: 1) set a time frame: "I'm going to save $_____ for a home down payment by the end of 2015; 2) write down the steps to get there: "I'll double my savings every month." But you need a budget to "find" that extra money (maybe those beverage savings?). A budget also keeps you motivated – you won't mind cutting out some movies if it means a nicer summer vacation. 4. Spend smarter. If your budget shows you spend more than you earn, it can also reveal ways to spend smarter. If your budget shows you earn more than you spend, you can then figure out the smartest way to spend, save, or invest the excess. Without a budget, you can't be sure about that surplus, so the extra money goes to mindless purchases. 5. Be prepared. You want to set money aside for unexpected medical expenses or repairs. These funds can also pay the bills if you're injured, sick, or laid off. A budget will help you set aside something each month to build an emergency fund to cover 3 months' expenses. If this gets hit, the budget can help you shift spending to build your emergency fund back up.