LOWE'S FINANCIAL

A budget is the most basic, useful and effective financial management tool available to manage your money.

Regardless of whether you are earning hundreds, thousands or millions of dollars, it is extremely important to know how much money you have to spend, and where you are spending it. A budget is the first and most important step towards maximizing the power of your money.

Having a budget does not prevent you from spending money, using credit cards, or taking out a loan for special purchases. Instead, a budget encourages you to be certain you can afford what you're buying and guides you through what lifestyle changes, if any, you'll have to make in order to pay for it.

A good budget should be flexible and change though the years as the demands and needs of the individual change. For example, recent college graduates may be concerned about saving for a down payment on a home, or paying off student loans. As these consumers marry and have children, a budget becomes important to meet the needs of a growing family, such as a larger home, and college expenses. By the time these consumers enter their 50s, saving for retirement becomes a major concern. Good budgeting will allow for modifications needed along the way to accommodate unexpected events such as a job loss, illness or divorce.

Financial experts regard a household budget as crucial to building wealth and creating a financially secure life. Here are several reasons to budget offered by financial planners:

• A budget lets you control how you spend your money, instead of your money controlling you.

• Making a budget will tell you if you're living within your means.

• A budget will allow you to “pay yourself first” and meet your savings goals.

• It allows you to focus and buy the things that really matter to you, rather than blowing money on things you don't even remember buying.

• Budgeting gets the entire family to focus on common goals.

• Making a budget helps you prepare for emergencies or large or unanticipated expenses that might not have funds to handle.

• Making a budget can improve your marriage. A good budget is not just a spending plan; it's a communication tool. Done right, a budget can bring the two of you closer together as you identify and work towards common goals and reduce arguments about money.

• Making a budget reveals areas where you're spending too much money so you can refocus on your most important goals.

• Making a budget can keep you out of debt or help you get out of debt.

• A budget helps you sleep better at night because you don't lie awake worrying about how you're going to make ends meet.

Need more reasons to budget? The failure to budget properly can cause any one of the following financial hardships:

• Not being able to care for family needs or emergencies: Kids and Spouse

• Not being able to enjoy a comfortable retirement.

• Having your credit ruined and paying high interest rates.

• Having no other option other than filing for bankruptcy.

• Having a car you can’t afford repossessed.

• Cause you to face a foreclosure on a home you can’t afford.

• Not have the money to be able to take advantage of financial or business opportunities.

• DIVORCE