Is budgeting important for American households?

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By: ruthgibson
on 8th Jun,2015

As a consequence, most of the Americans also avoid solving their financial problems.
Is budgeting important for American households?

The most basic financial duty of the federal government is suppose to be pointing out the growing national debt and seeking ways to handle budgetary problems, in which it has failed. As a consequence, most of the Americans also avoid solving their financial problems.

A survey from Gallup’s annual Economy and Personal Finance survey, conducted on April 4-April 14, 2013, depicts that only 32% of the Americans pen down a budget every month to track their income and expenditures. Only 30% actually lay out long term financial plans outlining their future savings and investment goals in detail. People with higher incomes, college degrees, Republicans, independents, or those making $75,000 or more an year, agreed on making a budget and tracking down their expenses, but less than half in the group said they just keep an eye on their finances. Only a quarter of people with a high school diploma or less said that they actually keep track of their financial life.

The Pew Social Trends poll which was conducted a few years back asked “Do you have a budget to guide your household expenses or don’t you rely on a formal budget?” Talking about a broader question like this, the poll results show that 48% Americans keep a budget.

Despite the frequent political appeal about a budgeted family, Gallup’s poll don’t clearly portray America’s trending financial behavior. The Gallup survey of 1951 showed that only 40 percent of Americans actually had a budget for household expenses. The poll when asked that who didn’t keep a budget or reasons why they elude it, the frequent response from the public was they are spending it anyhow.

Nearly one in three Americans develop a detailed budget, whether it is written by hand or made in excel sheets on the computer. This is a small fraction of the society who tracks down their monthly income and expenditures, majority of the population do not make this effort. There are various reasons mentioned below because of which the Americans stay away from making a budget.

Reasons why Americans avoid budgeting

a. The most important reason is the strain of the recession that prevents Americans from following a budget. Many people’s income (if any) is not even enough to carry on with their basic expenses, so it’s not possible that they can even think about budgeting.

b. For many it’s difficult to change their spending habits, and it’s very important if one actually wants to execute a budget. Changing lifestyle with budgeted amount isn’t very easy for many of the Americans.

c. The modern banking technology which gives you the freedom of checking your balance anytime is also a reason which prevents Americans from making a budget.

d. Another reason can also be staying aligned with the world around oneself. Maintaining a lifestyle where they keep a check on what others think about them is also a sad but true reason.

It can obviously be difficult to break old habits, or even learn correct ways to do things when you’ve been doing the wrong things for so long. It’s important to remember that you are the only one stopping yourself from being able to budget your money. However, creating a budget doesn’t mean that all your problems are going to solve, But it’s an important step in determining your financial health and creating financial stability. It’s not a difficult task to create a budget, the problem is sticking to it.

Below are mentioned few very good reasons which can make you think that budgeting doesn’t only gives you power and control over your finances, but a lot more things.

Reasons why you should follow a budget

a. It saves you from living paycheck to paycheck.

b. It helps you to avoid getting into debt.

c. It helps you in paying all your bills on time.

d. You can think about retirement, that too on time.

e. If there is an emergency in the family, you can be a saviour.

f.  It helps you to distinguish between needs and wants.

g. You can actually learn to live with less money, you can work less if that becomes a habit.

h. It can reduce your stress level and help you to sleep peacefully.

When you actually have a look at the benefits of keeping a budget and following it, it’s obvious that you will embrace the concept, rather than losing sleep over it.


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