Why Budgets Work

As many of you know I am majoring in personal finances so I get the opportunity to take Financial Peace University (Through Dave Ramsey) as well as piles and piles of personal financial classes from our local University. Here are some interesting things I've learned:

According to my text book (Consumer Economic issues in America) three out of four purchases are impulse purchases.

Having a budget eliminates those impulses. You actually start to think about what you are going to buy, how much you are going to spend, and more importantly how much you can afford to spend.

Now that you have a written budget, how often would you say you impulse buy? My husband and I were estimating that we impulse on maybe 1 out of every 100 purchases! So we're not perfect, but we do get to enjoy huge savings.

Also according to my text book (Consumer Economic Issues in America) when you actually plan your budget out you get more Utility from the things that you do purchase than those that just spend without a plan. *Utility means satisfaction.*

On average you either spend 20% less when you have a budget and plan your expenses, or you are able to buy 20% more value than you would if you didn't have a plan. Again that's from my Consumer Economic text book. You get more 20% more bang for your buck just by planning ahead.

Plus you aren't as pressured by sales people, discounted items that you don't really need etc. If it's not in your budget, you don't buy it. And if you want to buy it, you put it in the budget.

Just thought I'd share some interesting tidbits from all these classes I am taking!

Thanks for reading :D