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December 18, 2019

Keyonda Garry Explains the Benefits of Budgeting for Your Overall Wealth

Budgeting is the most basic tool for managing your personal finances, and yet many people fail to create one. There is a commonly held belief that budgets are all about restricting spending. Budgeting helps paint a picture of your financial circumstances, which will ultimately give you greater control over your money, teach you about money management, reduce your financial stress, and best of all, save you more money. Keyonda Garry is a logistics field Specialist based in Ladson, South Carolina. She has used budgeting to manage her personal finances since she was a young woman.

Budgeting Provides a Safety Net for Unforeseen Expenses

There is nothing worse than a last-minute emergency that wipes out your entire savings. Keyonda Garry recommends setting a budget to avoid this very situation. Budgeting will allow you to financially prepare for unexpected expenses, which in turn, will make you much less stressed about them when they arise. A trip to the hospital, car trouble, or electric problems are all examples of unforeseen expenses that will come up. Designing a budget that considers unpredictable variables is key. You can’t control everything, but you can do everything in your power to ensure you and your family will be minimally affected should an issue arise. Keyonda Garry advises all people to keep an emergency fund of at least $1,000 in their savings account exactly for these types of situations. Eventually, your emergency fund might even grow to the point that it becomes a full-blown safety net. A safety net is a larger version of an emergency fund that would be able to keep you afloat for a minimum of six months if for example, you lost your job and were not earning income for an extended period.

Budgeting Gives You Control Over Your Money

According to Keyonda Garry, budgeting enables you to have full control over your money, and who wouldn’t want that? A budget is essentially a tool that you can use to intentionally control your spending habits. The first step in creating a budget is assessing your financials now. Understanding exactly where your money is going on a monthly or even yearly basis is key. It is only once you have a clear picture of your spending that you can begin to identify where your spending habits are weakest and then make a change. For example, you likely don’t think about the fact that your daily coffee run is likely costing you over $1000 per year. Overall, a budget will help clarify your financial circumstances, and with this new knowledge, you’ll have 100% control over how you spend your money moving forward. At the end of the day, this newfound sense of control over your money will make you feel empowered and allow you to save more money than ever before.

Budgeting Fosters Communication About Finances

Money is often a “taboo” topic of conversation, but it shouldn’t be. Rather, budgeting as a way of opening the lines of communication about your finances. If you’re someone who shares money with your spouse, parents, or children, then it’s imperative that you’re able to talk about it. Firstly, a budget is a great method of communicating just how you and your family are spending money. Once everyone involved is aware of how the money is being used and is on the same page, it is much easier to discuss common financial goals in a calm, rational way. Teamwork is especially important in romantic relationships, as according to Keyonda Garry, finances are the most common source of arguments amongst married couples. Working on a budget together, as a pair, will help you avoid conflicts and resolve any differences you feel about spending. Lastly, couples should aim to include a discretionary fund in their budget whereby a spending limit is set for each partner. In this scenario, each person must abide by the set budget, but is able to spend the money however they want, such as on Netflix or fantasy football, without feeling like they must get permission first.

Budgeting Enables You to Invest in What Matters

Keyonda Garry claims that one of the greatest benefits of budgeting is that it enables you to invest in what matters. The two most important investments a person can make are for their children and for their retirement. An integral part of any budget is setting financial goals and figuring out how to achieve them. For example, many people who don’t have a budget fail to realize just how much retirement will cost them. The result? They don’t bother saving for retirement until it’s too late. Budgeting provides you with the wherewithal to make smart financial choices for your future, such as investing. By looking at your budget and your financial goals, you’ll quickly be able to determine how much money you need to be investing each month in order to have enough savings to put your child through college or retire and live the lifestyle you’ve always dreamed of.

Budgeting Allows You to Live Better

There is a common misconception that budgeting means living frugally and not enjoying life. This couldn’t be further from the truth, asserts Keyonda Garry. Taking control of your finances will have nothing but positive outcomes on your life. Most importantly, budgeting puts you in the driver’s seat when it comes to your personal finances. Understanding exactly how much money you have and how much you’ll need in the future is the first step in creating a financial plan. Creating a clear plan that includes achievable financial goals is the best way to put your mind at ease and reduce financial stress. You’ll never be stuck worrying about whether you can afford to do or buy something because you know your financial status like the back of your hand.

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