Few tools are more powerful or effective for getting your finances in shape than setting an effective budget. A budget will help you keep your spending in control, makes it easier to save cash, and will provide many other benefits. In fact, that’s why we put this blog post together. We’re going to show you 7 great benefits of setting a budget finance plan.

With a budget finance plan in place, you can take charge of your finances. Of course, apps and software often help when it comes to budgets.

1. Teach Yourself Financial Discipline

Arguably the most important benefit of a budget finance plan is that it forces you to pursue financial discipline. Many people simply overspend on a monthly or yearly basis. With a budget, you set limits and while you may break the rules from time to time, especially in the beginning, if you’re persistent you’ll start to build discipline.

2. A Budget Will Help You Understand Your Spending

Many people don’t understand why they spend so much. You think you’re being frugal, and yet your wallet or purse is always empty. You might be overspending at the movie theater, stuffing your closet with clothing, or blowing your cash on the weekends. Once you have a budget in place, you’ll have an easier time seeing where you’re spending money.

3. Cut Down on Wasteful Spending

Once you understand where you’re spending money, you can find ways to cut spending. If you love swinging by the local coffee shop for your morning brew, it might be time to invest in a coffee machine, for example. Ordering takeout every day? It’s time to start cooking at home at least some nights and packing a lunch for work.

4. A Budget Makes It Easier to Identify the Big Costs

Besides wasteful spending, you’ll also be able to identify big-ticket items that are causing you to burn through cash. That might mean health insurance, housing, car costs, gasoline, or something else. Is there a way you can cut down on these costs? Move into a smaller apartment? Buy a more fuel-efficient car? You’ll have a better idea of what spending you need to cut after you set up a budget.

5. With a Budget, You Can Set Goals

We all have financial goals. Maybe you want to save up enough money for a down payment on a house. Or perhaps you want to grow your retirement portfolio by 20 percent. Whatever your goals are, they’ll be hard to track and meet if you don’t have a budget in place.

6. Build a Financial Safety Net

One of the most important goals you can set is building a financial safety net. At the very least, you should have liquid assets to cover three to six months of living. This means you should be able to pay for rent, car payments, and everything else. This way, if you’re laid offer or an emergency emerges (such as a medical emergency), you’ll have enough cash to stay afloat while you get your feet under you.

7. Budgets Make Financial Discussions Easier

Talking about finances with your family can be difficult. It’s a sensitive topic and everyone has their own needs. A budget will provide clarity, facts, and a solid foundation for a meaningful discussion. This will make financial discussions easier for everyone involved.

Conclusion: You Need to Set Up a Budget

Follow the news headlines and you’ll constantly hear about people struggling to pay student loans, their mortgage, car payments and more. Pundits will warn of the next looming recession, investment gurus will tell you about all the opportunities you’re missing. The fact is, finances are complicated. However, setting up a sound, a thorough budget will provide a solid foundation for financial prosperity.

Of course, setting up a budget is often easier said than done. Fortunately, a wide range of tools is now available. Check out Budgetry and find the tools that will best suit your needs.