(6 minute read)

Had you told me five years ago that building a budget would make my life simpler, I would have laughed out loud. The thought of creating a budget truthfully terrified me before I had one. The fact that I would have to dive into all my expenses, track my spending, and generally have to face all the shame and guilt I felt about my debt, and my spending had me diving under the covers and not coming out. I’d also heard throughout most of my 20’s that “budgets don’t work,” so I was a true skeptic that even if I built a budget, that it would help me out in any way, let alone make my life simpler. 

Fast forward five years, and I am a budget convert! If you are guessing where your money goes every month, feeling fear or anxiety when it comes to money, don’t feel like you have the power to make your own money choices, or are in debt, then ignore all those people who say you don’t need a budget because you do! Not only did building a budget help me get out of debt, but it also made my life so much simpler. Want to know how? Read on!

Takes away the guessing game

There was truly nothing more mysterious to me than how much money I was spending before I had a budget. I thought “I’m a smart girl, I’ll just keep track of it in my head” or “I don’t think I’ve spent that much so I can afford to go out to eat with my girlfriends” when those were just myths I was telling myself. Hard truth time – unless you write it down, you really will have no idea how much you are spending. And if you don’t know how much you are spending, then you have no idea how much you have to make to cover your expenses, how much you have that you can save, and how much you can cut from your spending to achieve your goals. 

So if you find yourself playing a guessing game at the end of every month, asking yourself questions like “will I have enough in my checking account to cover my rent or be able to afford my bills this month” then building a budget will make your life simpler because it means no more guessing. 

Banishes fear

One of the things I was always struggling with before I built a budget was fear. Fear about not making enough money, fear I was spending too much money, and fear that I wasn’t saving too much money. I’m from the generation who has been told since we were children that social security is going to run out by the time I retire and that my retirement savings are entirely my responsibility. On top of that, it costs more for my generation to live, go to school, eat, and buy a house more than any other generation before us, sometimes making the fear feel all too real.

Fast forward to five years. Now that I have a well-established budget, I can genuinely tell you that it banishes the fear I used to feel about all the “unknowns” or the forces I felt like I couldn’t control when it came to my finances. There is nothing to fear when you have full transparency into your money, and you have a well-built plan to get you to your goals. 

Removes anxiety

Who has ever felt anxiety when talking about money before? Are you mentally raising your hand here? Well then join the club. For years both as a child and a young adult, I was told that it was taboo to talk about money. So growing up and once I was a newly minted adult out on my own, I never really was taught about making money or managing my own money, which can be cause for some serious anxiety. 

My paycheck would come in, and I just genuinely had no idea how to allocate it. What should I be spending on rent? How do I save money? What is reasonable to be paying for my bills. And as I navigated this world of money on my own, I started to develop some severe anxiety around it because I felt like my money was managing me. 

When you build a budget, all that anxiety starts to fade away. No more are you wondering how much to save or what you can spend, but instead, you feel empowered because you have a strategy for how to allocate your paycheck best.

Empowers you to make choices

On that note of empowerment, let’s talk about how building a budget makes your life simpler because it empowers you to make choices. When you feel l like your money is managing you, you start to feel like you don’t have any say in the matter. The choices you want to make, such as going on a vacation or saving for a downpayment, feel limited to you because you always feel like your whole paycheck “disappears” at the end of the month. 

Furthermore, when you feel like you aren’t empowered to make your own choices, you can start to feel very cut off from actually living your life, which can have a terrible domino effect. You might begin to resent your job, feel depressed, or feel helpless, which are awful things to feel when you think you have no control over the situation. Once you build a budget and stick with it, you can make line items that you allocate funds to that are entirely your choice! Now, how cool does that sound?!

Build a pathway out of debt

I think the most powerful way that building a budget can make your life simpler is that once you have one, it helps you build a pathway out of debt. Most people are in debt. In fact, according to CNBC, “The average American now has about $38,000 in personal debt, excluding home mortgages.”

I was in even more debt than that, but building a budget gave me a clear pathway out of it. First, it helped me honestly figure out how much money I had coming in and how much I had in expenses each month. Once I could see that all laid out in front of me, I made three key money moves that helped me climb my way out of debt: 1) I increased my income by taking on as many side gigs as I could. 2) I decreased my expenses by critically evaluating my spending and cutting back where I could. And 3) I allocated all the extra money I now had through increased income and reduced spending to my debt. 

The budget I built simplified my life because: it took away the guessing game I played every month with my money; it banished the fear I had; removed my anxiety; empowered me to make the choices I wanted with my money; and ultimately helped me build a pathway out of debt. Not only helped me get out of debt, but it helped me build a $20,000 emergency fund and save over $80,000 for retirement! I also was able to fully fund my down payment for my house as well as pay for my first-floor renovation. Inspired to build your first budget yet?! Let’s get started!

xoxo,
Amy