Why Having a Personal Budget is Important

Why Having a Personal Budget is Important

Why is a budget important? It’s time consuming trying to note down how much money you spend, when, where and what you spend it on. Ideally if you have goals like buying a home, buying an income generating asset, clearing a loan or even retirement then planning is vital and one important factor to consider in your plan is to keep an eye on how you spend your money.

Living without a budget is like travelling without a map; you will arrive at your destination but it will take more time and it will be very expensive.

“A budget is telling your money where to go instead of wondering where it went.”- Dave Ramsey

Many people find having a budget as restrictive and develop a lot of obstacles in creating one. People forget that a budget is not all about restraining it’s about goals, what you want to achieve. In the current financial situations it’s even more important to have a budget and the sooner you start, the faster you will reach those goals. Having a plan based on the amount of income you make will enable you focus on expenses and channel your income to where it should go. What people don’t realize is that decisions they made in the past are what resulted in today’s situation so it’s best to plan for tomorrow by working on it today. If your current situation is wanting then lets avoid doing the same mistakes again by having a budget which will put best use of your income by making informed choices. Remember that the advantages of creating an effective spending and savings plan far outweigh the disadvantages.

Set SMART goals

People often make unrealistic goals which in time they get disappointed. So the first thing to do is to set a goal, not any goal but a SMART one. In the words of author Paul J. Meyer, SMART goals are


How to track your money

A Simple pen and notebook

Cheap and everyone can afford, not a big expense remember we are on a budget. So you don’t have a computer or software not a problem. In fact its advantages are you can have it with you all the time, accessing it all the time and no data loss. This least-expensive option is within anyone’s means. You have to be careful not to lose it or exposed to things like water   or it will get damaged.


If you have a computer already, then using software’s like Microsoft Excel which can help you make less mistakes in long calculations if you have long term goals as you can use formulas to get the running total of how much money you have left to spend in a particular month or how much you are savings are.

Mobile APPS

The increase use of smartphones has enable us to have different apps .so if you have a smartphone and  an internet connection then you can download an app to help you with the task just be careful any online system could have weaknesses that hackers can exploit. However, if you’re just using it to calculate the running balances for your savings and grocery, bills and other expenses, it should be OK.

As your budget activity takes effect you will find that it helps you a lot on the way in building new behaviors.



Common Budget Mistakes Include

  • Forgetting to Write Down Expenses
  • Impulse buying
  • Budget Busters like credit cards
  • Not accepting reality by intentionally not noting down expenses


A budget will involve self-discipline and sacrifice, but in the long run it will help you develop wise spending habits to better manage your income now and into the future.Always update your budget regularly to reflect changes in your situation, such as a income increase or new home.

Don’t forget to reward yourself for all your hard work of keeping a budget. After you have accomplished your goal you need something to motivate yourself so rewarding yourself before setting up another goal is important. So budget for your reward!

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About author

Yassir Al Ammar
Yassir Al Ammar 6 posts

Yassir Al Ammar is a Management and IT Consultant from Mombasa, Kenya.He is also an Author, Speaker and Trainer in the fields of Business, Management & IT. He can be contacted at yassir@yascomafrica.com

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