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5 Surprising Benefits of Budgeting

For the longest time, I never understood why so many people advocated keeping a budget. Okay, if you’re money is tight, and you’re living paycheck-to-paycheck, then sure, making a budget makes sense. And if you’re spending too much, and incurring debt, then a budget makes sense. But what if you’re on a decent financial track — naturally? You make a decent salary, you spend less than you make (because your needs just aren’t that high), and you normally wind up with savings at the end of every month, without trying. If that’s your situation, do you need to budget?

Until recently, I thought that the answer was no. Why bother budgeting when everything’s fine? Then I tried it. And I was totally surprised. Here are the benefits of budgeting, even when you’re doing alright:

#1) You know where your money is going.

You might think you know what you’re spending money on. But when you see the numbers actually written down, you might be in for a surprise.

As it turned out, I spent far more on restaurants than I ever imagined. And I knew that my spending on restaurants was out-of-line with my goals. In other words, I found an area in which I could cut back.

#2) You save more.

As a result of finding new places to cut back, you end up saving more money. Sure, you’re already saving a decent amount of money (naturally), but who doesn’t want to save more?

3) Reach goals.

The additional savings can help you reach your goals faster. If you’re saving for the downpayment on a house, for example, you might currently be on-track to buy a house in three years. Budgeting can help you increase your savings, which can help you get there in two years.

That might not sound like a big deal (buying a house in 2 years vs. 3 years), but that might potentially allow you to capture lower housing costs (if we’re in a market where prices are rising).

And on the back-end, when you’re older and you’re paying down your mortgage, you’ll be extra-happy to have the mortgage paid off one year earlier than usual, so that retirement (or whatever is next) can come even faster.

4) Think about money.

By making a budget, you’ll form the practice or habit of regularly thinking about your money and finances. And that’s a great habit to form. Whatever area of your life you start paying attention to (your finances, weight, etc.) tends to be the area where you see the most improvement.

5) Think about goals.

In addition to thinking about your dollars and cents, the practice of budgeting can help you contemplate your life goals. Where do you want to be in five years? What do you want your life to look like? And how can your current spending and saving habits help you reach those goals?

You might decide that you want to be completely mortgage-free, for example, in five years. Or you might decide that you want to start a family, so you need some extra savings. Either way, making a budget can jumpstart that planning.

Kennedi writes about finance for women at Face and Fitness.



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. You know where your money is going, which can help you sleep better, which can help you be more productive, which can help your performance, which can give you raises, which can give you more money. Pretty cool!

    • It’s a self-fulfilling cycle! Great point, Money Beagle.

  2. They say knowledge is power. That’s how I feel about budgeting.
    As I track my spending, I’m empowered to make improvements in my earning and spending categories.
    I think about money, but only as often as I need to. It’s a balancing act.

    • @Mike – One of the benefits of budgeting is that you don’t have to think about money all the time — like you said, you think about it only as often as you need to. You can sleep easier knowing that your money is on-track.

  3. I heart budgeting…no, seriously. It’s amazing the piece of mind it gives me every month to see a detailed breakdown of every expense. Even if I’ve exceeded my budget, I feel good knowing what I need to work on for the next month.

    • @Addison — The peace-of-mind is a great benefit. As you said, even if you exceed your budget, you’re aware of exactly what happened. You’re not left wondering where your money went.

  4. For melancholy/introvert type of people, like me, loves to budget and write down income vs expense details. Also, its one of the ways how to retire a millionaire. Notice that most successful business owners know accounting. An example is JP Morgan. Are you familiar with that name?

    • Budgeting can definitely help you grow your net worth and maybe even become a millionaire!

  5. So true! Once I started to budget, I became more interested in finding ways to save money and to set up goals and pursue them. When I wasn’t budgeting, I would just spend money without care or worry.

    • That’s great, Jon! I’m glad you’re more goal-oriented with money now.

  6. Yes, a lot of people tend to think budgeting is all about saving more money. Personally, I think some of the other advantages far exceed any money saved. It gives you information to make better decisions, enforces discipline, and helps you ensure you’re spending money on the things you value most.

    • Very well said, SB! Thanks for reading and commenting.

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