Question

Having a well formed budget can help you become a financially independent individual. Identify and explain two reasons a budget can help you on your path to financial independence. Finally, identify and explain two difficulties you may face when trying to establish and follow a budget.

Answer 1

One reason having a budget will help you become a financially independent person is that it helps you cut off any unnecessary purchases which helps you save money and makes you more independent. Another reason is that it lets you keep track of your needs and wants which makes you more independent if in a case you were to become bankrupt you'd already be prepared and be able to spend your savings wisely. One of the troubles you may face include, impulse purchases. You may make many impulse purchases (for example, when you're in a lineup at a grocery store you may grab a candy bar without thinking and but it). Another trouble you may face is figuring out the true difference between a need and want. You may believe that your truly need something but in reality it's a want (for example, do you really need that jacket? Jackets are essential to keep you warm but you already have enough). I hope this helps! :)