Why do companies need Accountants? What are the Accountants' responsibilities? The primary task of accountants is to prepare and examine financial records. They make sure that records are accurate and that taxes are paid properly and on time. Accountants and auditors perform overviews of the financial operations of a business in order to help it run efficiently. What happens to companies, if they don't hire Accountants? Companies will likely overspend, and the worst situation will go bankrupt. This concept also works on individuals. If you don't set a budget for your monthly usage, you will also likely be overspending and might even have to borrow from your friends or family. You don't need to have a big amount of money in order to start budgeting. In this blog, I will list down the importance of budgeting.
1. Help To Achieve Your Goal
Budgeting helps you to keep track of what you are spending on and avoid overspending it. Keeping track enables you to focus your goal. Your goal for saving money might be buying a car, house, getting married, and etc. If you don't have any goal, then it is better to set one for yourself. Make sure your goals are specific. If we do not have a goal, then we would probably be buying anything that attracts us.
2. Avoid From Owing Debts
Many people owing money everywhere thinking that they are able to pay-off soon, but in the end, they go bankrupt. With budgeting, you are able to estimate and budget your monthly spending, saving, and leftover. After knowing how much left from your monthly budget, then you can determine whether you want to spend money with your credit card.
3. Boost Your Productivity
Working days aren't fun at all. We often sit in our workplace and hoping that the weekend comes right now, and we do not have productivity and motivation to work. This happens when we do not have a goal or do not have a way to achieve it. Let's say if you're a salesman, and your goal is to buy a laptop by the end of this year. Your budget might tell you that you need to work hard and make more sales and get more commission, to make sure that you are able to buy the laptop by the end of this year.
When you budget and take a “big picture” view, you will see potential money problems in advance, and be able to make adjustments before the problem appears.
5. Spending Without Fear
There are times when we want to buy something but are afraid that we might not have enough money for the rest of the month. If the items were in your budget list, then you won't be afraid to spend the money, because you know how much money you will be left after spending it. Sometimes you might just want to buy something that's not listed in your budget, if that is so, then you can take money out from your emergency or savings.