Today, we’ll deal with the dreaded “B” Word – Budget. If you were to conduct a poll and asked people if they had a budget, the majority would say they do not. People are very reticent to make a budget, so much so that new names are now in place to replace the dread associated with the word budget. They are now called a cash flow plan, a spending plan, or a financial plan. I like to call it a Money Blueprint . Just as a blueprints in construction tell you where everything goes, so does a Money Blueprint. You are telling your money where to go.
Why don’t people want to have a budget? Here are some excuses for not making or having a budget:
- They are too restrictive.
- I don’t make enough money to need a budget.
- I won’t have any money for entertainment.
- I don’t have time to make a budget.
- Budgeting is boring.
- I don’t have to write it down. I keep it all my head.
- I hate math or numbers.
- I keep track of my spending.
Do you see your excuse in this list for not making or having a budget? Is your excuse different from those above? Whatever your excuse it is not a good excuse for not making and having a budget. Also, making and having a budget won’t do you a bit of good if you don’t stick to it. Not using a budget is like having a game plan and then ignoring it when you go out the field. Zig Ziglar says, “If you aim at nothing, you’ll hit it every time.”
Let’s look at those excuses and see how to conquer them.
- They are too restrictive. A budget is not restrictive. It actually allows you to see where you are spending your money each month. Using a budget is actually a “freeing” experience. John Maxwell said, “A budget is just telling your money where to go, instead of wondering where it went.”
- I don’t make enough money to need a budget. This is undoubtedly the worst excuse. It is even more critical to have a budget when you don’t make a lot of money. You need to account for your money each month, so you won’t have any surprises.
- I won’t have any money for entertainment. When you create a budget, you have a category in it for entertainment. It might not be what you are currently spending, but it will be what you can afford.
- I don’t have time to make a budget. Time not spent on making a budget is wasted time. Don’t tell me you cannot spare 30 minutes a month on your budget. C’mon! I admit that it will take longer when you first get started budgeting because you’re doing something new and it takes time to get the hang of it. However, after you’ve done it two to three months in a row, you get to be a pro at it. After that, it won’t take more than 30 minutes or so. Seriously, you can spare 30 minutes a month if it means saving literally tens to hundreds of thousands of dollars over your lifetime, and reducing the stress of not knowing where all your money is going. Take the time to do it. As Nike says, “Just do it.”
- Budgeting is boring. I admit it doing a budget is boring unless you love numbers. However, do you enjoy being frustrated financially and letting your money drain away your paycheck? Wouldn’t you rather be proactive and exercise total control over your finances? Having total control sounds a lot more fun to me! Stop using the “boring” excuse and show some interest in keeping your finances running smoothly.
- I don’t have to write it down. I keep it all in my head. Really? If you’re one of those people who says you can keep track of everything in your head, then you’re just fooling yourself. Unless you’re a genius with a computer-like brain, then you only have a general idea of where your money is going. When you have a solid, zero-based budget it shows you where and how to spend your money on paper before you spend it in the real world. There are a lot more moving parts to a budget than you can keep track of in your brain. Therefore, take the time to write it down, you’ll see a huge difference compared to what’s in your brain.
- I hate math or numbers. Do you know fourth grade math? Fourth grade math is just simple addition and subtraction! Or more like second or third grade math! I know making a budget probably isn’t your cup of tea, but it’s not Rocket Science or Quantitative Physics. In fact, you don’t even need to do any calculations if you use the spreadsheets. Don’t let this lame excuse keep you in debt and give you moneymares for years because you’re not a “math person”. Overcome the fear! If you don’t want to use the spreadsheets, then use a calculator, and learn to get your finances on track for good!
- Finally, the eighth excuse, I keep track of my spending. That’s great! Keeping track of your spending is a great starting. This means that you’re willing to take the time to develop a regular habit. However, the problem with only tracking your spending is that it only shows where you spent your money. You are not telling your money where to go. A good zero based budget, when you do at the beginning of the month, before you spend the money, allows you to be proactive instead of reactive. It provides direction on how to spend your money. Planning your spending in advance, using a budget, is always better than figuring out what you spent in the past, after potential damage may have already been done.