Essay about Cause and Effects Not Keepinga Personal Budget
1233 Words5 Pages
Determining Causes and Effects Revised Version
Personal budgeting is an important factor in regards to successful long term financial stability. Budgeting has many great aspects as well as showing areas of weakness. It can show the truth about your personal financial spending habits, areas that are not looked at enough, and if there are needs for a larger emergency fund. The reality of personal budgeting is that many people potentially do not keep a personal budget for one reason or another. People also don’t consider the negative effect that it could have on one personally and or how it effects the economy.
One major reason that an individual does not keep a personal budget would be the lack of knowledge on how to possess a…show more content… Certain individuals may not be able to cope with the amount of stress that might present itself with planning and budgeting. The overwhelming feeling of being under a pile of debt can become debilitating which can come out in the process of creating a budget. It makes it a reality at that point. Many people have a hard time dealing with those emotions or they’re just lazy and don’t want to take the time to create a budget for themselves.
Finally, the lack of knowledge, adequate amounts of funds, and stress are all very relevant factors, however, it is a reality that someone may not physically be able to prepare a proper budget for themselves. The elderly, disabled, and mentally handicapped are all individuals who may not have the capacity or physical ability to do so. This poses a challenge in their lives, because they are not able to financially fend for themselves. They may have to rely on paying someone to help with their finances or entrusting a family member to help with their budgeting needs.
With all of these potential causes for not keeping a personal budget, there are effects on the economy as well as the person involved. One recognized effect of not keeping a personal budget is living out of a person’s means. This effects the economy tremendously. For example, the recent housing market crash was a true testament of poor personal budgeting methods (Curry, 2013). People were entering themselves into a