Budgeting - Not Much Fun But Definitely Worthwhile
I don't think there are many people who enjoy budgeting. As a matter of fact, for some people, budgeting is probably as much fun as doing your taxes. The good news is that budgeting, whilst not much fun is definitely worthwhile, leading to more savings, less debt and best of all less stress about your finances.
People often do not budget because they find it to be an easy process. Where do you start? What tools do I use? What do I budget for? These are very common questions and when you sit down and don't know the answers to these questions, the easiest thing to do is nothing. Then come the usual excuses, budgeting, it's too hard or budgeting, I'll get around to that another time. Let me tell you, if you get past the initial hurdles and understand how to budget, your finance fortunes will be better off.
It would far to say, that people do not fully understand how much they spend until they understand how much they spend. That may sound a little strange but if you read it again and think about it, it does make sense.
If you don't sit down and complete a budget, how do you really know where your money is going every pay period? Do you really know how much you're saving or more importantly whether you're spending more than you earn? Nowadays, it is common place for people to live beyond their means because they have credit cards which allows it.....then the banks charge big interest rates for the privilege of letting you get deeper and deeper into debt.
How many people get to the end of their pay period, "hanging out" for their next pay day - this is not a good way to live your life and will mean you will continue to be controlled by your finances instead of controlling your finances.
People who are financially successful in life usually have strong control over their finances and understand how they spend their well earned money. People who are able to save are usually able to reduce their mortgages quicker, don't have high credit cards debts and enjoy a higher level of disposable income and definitely less stress.
Imagine reducing the time in takes to pay off your mortgage by 5 years - what would that mean to you? Here are a couple of examples to illustrate how you can reduce the term of your mortgage by 5 years and the amount of interest you'll save in the process:
Example 1
Loan amount $300,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $533
Total interest payable $393,482
Additional weekly payment to reduce loan by 5 years $45
Interest payable on 20 year loan $301,165
Interest saved $92,317
Example 2
Loan amount $400,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $711
Total interest payable $524,642
Additional weekly payment to reduce loan by 5 years $60
Interest payable on 20 year loan $401,554
Interest saved $123,088
Example 3
Loan amount $500,000
Interest rate 7.99%
Term of loan 25 years
Weekly repayment $889
Total interest payable $655,803
Additional weekly payment to reduce loan by 5 years $74
Interest payable on 20 year loan $501,942
Interest saved $153,861
If you sat down a made a budget, I'm sure you could find a way to reduce your spending on certain items by $45 or $60 or $74 to ensure you reduce your loan term by 5 years and save $92,317 or $123,088 or $153,861 in interest.
Savings money each week doesn't happen by itself and until you understand exactly what you spend your money on, you won't have the opportunity to cut back. Listing all your income and expenses can actually be a scary process and something you may not entirely enjoy (it may indicate you are currently living outside your means!) but as you can see from the interest savings listed above, it is definitely worth it.
If you're struggling with budgeting and need some assistance, www.easy-budgeting.com has an easy to use budget planner available for downloading and provides tips, guidance on budgeting to assist with the budget process.
Remember, budgeting is the first step towards taking control of your finances.
Related Tags: budget, budgeting, budgets, budget planner, budgeting tool
Rhys Campbell is a qualified Chartered Accountant residing in Australia, with over 16 years experience in the finance / commerce industry worldwide and is the creator of http://www.easy-budgeting.com. Your Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are