Home Federal Blog
Why Budgeting Is Important

We’ve all heard about the B-word (budget), yet many of us still do not have or utilize a household budget. You may think, “I’ve made it this far, why start now?” but, since our goal is to enhance our clients’ financial well-being, we’re here to tell you that budgeting is important and it’s never too late to start. Here’s why…

SOBERING PERSONAL FINANCE STATS

Budgeting helps you to not overspend beyond your means, keeping you out of crippling debt and helping you save for a successful retirement. Data can confirm that, as Americans, we could be doing better. The lack of financial literacy and planning (aka budgeting!) costs Americans over $400 billion dollars a year on debt interest and fees. If that’s not enough to get you to start budgeting, let’s see if these other statistics do:

• The average credit card debt in America is between $5,000-$6,270.
• Around 40% of Americans have less than $300 in savings.
• 54% of Americans live paycheck to paycheck.
• Nearly 40% of high earners (those making more than $100,000 annually) live paycheck to paycheck.
• 26% of 30-44-year-olds have no retirement savings.
• 17% of 45-59-year-olds have no retirement savings.
• 13% of 60-year-olds have no retirement savings.
• 43% of Americans worry about their finances daily, and 34% lose sleep over their personal finance.

HOW CREATING A BUDGET BENEFITS YOU

Making a budget is the most important thing you can do to manage your money. It will keep you from feeling financially overwhelmed because you will know exactly how much money is coming in, where your money is going, and be able to plan for the future.

A budget will allow you to prioritize your money, quit overspending, reduce your debt, and save for the future.

It also can reduce stress in your relationship. It’s common knowledge that money fights tend to be one of the biggest problems for couples. For married couples, having a budget plays an extremely important role in keeping you and your spouse on the same page. It helps you plan your financial future together, hold each other accountable, and make sure you are working towards the same goals. A budget helps you discuss, plan, and share your dreams.

Keep in mind, it’s not about limiting your fun, but quite the opposite. Having a budget actually opens up opportunities to have fun, as you should have a percentage of your budget banked to help save money for travel, entertainment, eating out, and more.

HOW TO GET STARTED MAKING YOUR PERSONAL BUDGET

There’s no doubt every household needs a budget – the benefits are undeniable. If you want to start, but aren’t sure how, you can utilize our free budgeting template available here, or you can talk to one of our personal bankers to help get you on track and on your way to personal financial success!