You need a budget because.....

Why do I need to make a Budget?

You think you know where your money goes and you don’t need it all written down to keep up with it, right? Well, if there is nothing left over at the end of the week, or you just don't think you spend that much but there's nothing left, try this:

Keep track of every penny you spend for one month. Every penny.

You might shocked at what all the little purchases add up to. Now, take the total you spent on just one unnecessary item for the month, multiply it by 12 for months in a year, or by 52 for weeks, if it's something you buy weekly (Starbucks maybe?) and see what it adds up to.

Eek! Did you get a fright? That, right there, is the very reason all of us need a budget.

If we can get control of the small expenses and plug the small money-leaking gaps, we have a much better chance of getting to that end result of financial freedom.

Little things really do count. Imagine you spend $5 every day on lunch. That comes to $1300 a year. Just on lunch! Now, obviously there would be a few weeks when you're not at work, public holidays, annual leave etc, but you get the idea. So if you change that to buying once a week instead, and packing your lunch the other days, you are only spending $260 for the year. That's a saving of $1040. That's huge! Put that towards your credit card debt or emergency fund, every bit helps.

See what I mean… it really IS the little things and you still get lunch every day AND that was only one little change in your daily routine. And you will find other places to cut expenses once your budget us in place.

So, get tracking those expenses. For one month, write down everything. Every small bit of change, every coffee or take-out meal, every stop at the thrift shop, every bill you pay, every time you fill up the car or bribe the kids with a soft serve cone (guilty over here!).

Once you have that information, you will be able to make a much more precise budget and get a good picture of where your money is going every month.