In 2008 you worried and logged every cent you made. You made out a budget and tried to stick to it. Every month you failed. Something came up and you overspent. It caused a great deal of tension and maybe even some arguments between you and your beloved spouse. It even made the kids feel depressed.
This is a new year. Then how come you started it the same way you started last year, worrying over money? Did you vow to make a new budget and stick to it? Again? If you couldn’t do it last year, what makes you think you can do it this year? Did you finally take some kind of magic pill that will make it easier? I doubt it.
So dump the budget. Forget about it. A budget is a tool and if it’s not working for you, stop torturing yourself, get a newer, different or better tool. I’m going to let you in on a little secret that those financial gurus who just love to make budgets won’t tell you: it’s not all about the budget; it’s about your spending habits.
Let’s make a comparison/explanation. We’ll use something everyone can identify with, a diet. Let’s say you want to go on a diet and lose thirty pounds. You want to get into the pants you wore a few years ago. So of course, you start to count calories. The first few days go okay, but after awhile it starts to become a real pain to plan and count those calories every day. Pretty soon you start to slip up and consume a few extra calories. Eventually, you get frustrated and give up. Sound familiar?
That’s exactly what happens with a budget. You do all right at first. But then it gets to be a real pain to count and account for every cent. You really can’t gain any ground. Or if you do, when you quit the strict budgeting, you revert back to your old money spending self.
Now, let’s go on with the analogy. A successful diet is one that changes your eating habits for life. Weight Watchers, which has one of the most successful programs around knows this. It’s not about counting calories; it’s about eating healthy and eating right. It’s about choosing a meal of vegetables and lean meat over choosing a greasy burger, fried potatoes and a chocolate milkshake.
It’s the same with a budget. A successful budget can help you develop healthy spending habits. A budget is a tool to make you aware of your spending habits. It’s not a tool to help you squeeze into the pants that you wore two years ago. If a budget doesn’t help you realize where your money is being spent, then it is a useless tool and you are stressing over something that won’t help you anyway.
So what do you do if you don’t use a budget? You need to determine what healthy spending is for you. Every person and household will have different spending needs. You need to develop a keen sense of awareness about what your money is doing. Do you randomly spend pocket change or do you know where your pennies are going? Do you plan regular expenses and put aside savings for unexpected events? Or do you live paycheck to paycheck and wonder what happens in-between?
Believe it or not, you control your spending. How you control it or don’t control it is the question. Do you work for your money or does it work for you? I hope you answered that it works for you. The key to healthy spending is like putting a leash on your dog. You need to lead your money where you want it to go, not let it run rampant down the busy freeway of life.