Most people have at least a vague notion that they probably should be doing a budget. Reality though says that very few people actually do a budget. A Gallup poll taken earlier this summer revealed that only about 32% of the respondents indicated they do a written budget each month.
So if it is something we kind of think we should do, why is it so many people don’t?
Certainly there are probably many reasons. For some the thought of a page filled with numbers sends a shudder down their spine. Others may know they ought to do a budget but they don’t really know where to start.
But I think there is another reason that many people avoid budgets.
I want to do what I want to do!!
I think many people see a budget as restricting. If I live on a budget then I won’t be able to do the things I want to do.
If I have a budget I won’t be able to have any fun.
If I have a budget then I won’t be able to go on vacation.
If I have a budget I’ll have to cut back on my hobby.
Not a “no”, it’s a “yes when”
The problem is I think most people have their thinking backwards when it comes to budgets.
A budget should not be about limiting what I do. A budget is about making sure I have the money available to do those things that are most important to me.
What happens when we don’t have a plan, is we fritter away a little here and a little there, then the end of the month comes and we wonder why there is nothing left. Meanwhile, when it comes time go golfing, or eat at that special restaurant, or take that little trip, or whatever that thing is that we really want to do, we pull out the plastic because the money isn’t there.
A budget is about priorities and choices
A budget is simply spending our money before hand on paper with a plan. You list how much income you have coming in at the top the page. Then you decide how you are going to spend that money this month. I’ll give some. Need to pay the mortgage or the rent. Need this much for food. Etc.
You decide what you will spend that money on. If there isn’t enough money to do everything you want, then with the budget you decide beforehand what is important. It is about setting priorities and then making choices.
Perhaps playing golf once a week is something you really love doing. If so great. But plan for it.
Maybe that means I skip eating out a few times, because for me playing golf is more enjoyable. Perhaps I need to cut back the cable package a little because I don’t watch most of those channels anyway, but that gives me the money I need to go out to eat with my friends at work for lunch each day.
I don’t know what it is that matters to you. What is important to you may not be important to me. But who cares. That’s the beauty of the budget: you get to decide.
Vacationing using cash
One of the things I dreamed about doing was being able to give my son the experience of seeing different areas of the country. But traveling is expensive. For my wife and I though this was an important goal we wanted to accomplish. At the same time I didn’t want to run up a bunch of credit card debt that would haunt us for months or years after the trip.
Enter the budget. We make choices about what is most important. That means there are some things that are less important to us that won’t get done. That also means that some years vacation means an inexpensive trip to spend a few days with family members.
Last year though we were able to save up cash to take a trip across country to Mt. Rushmore, Yellowstone National Park, and the Grand Tetons. It was a wonderful trip. All the more because the bills didn’t follow us home.
Now we are saving up for the next trip. (Grand Canyon and Yosemite just might be a part of that one…)
The point is through the budget we made conscious choices to makes sure we were able to do what was most important to us.
Spending without guilt
And the best part of budgeting is you get to spend without guilt. When I was looking across the beauty of Yellowstone Lake, I didn’t have a voice in the back of my head saying “yeah but how are you going to pay for this?” When you see that perfect sweater on sale at your favorite store, you can buy it with joy because you aren’t wondering if you just spend the money for the electric bill.
With just a little adjustment in our thinking, we can suddenly understand that the budget isn’t meant to take away all our fun. The budget allows me to make sure I do what matters most to me, and better yet, enjoy doing it knowing that I have the money to pay for it.