Why are you in debt? Ask ten different people that question, and you’ll probably get ten different answers. But the same root cause lurks behind them all:
You’re in debt because you’re spending more money than you have.
So why are you spending more money than you have? That usually boils down to one of two things: impatience or not planning ahead.
In other words, you want (or sometimes need) what you want or need RIGHT NOW.
That’s where budgeting can help. Plan ahead — for everyday expenses, irregular expenses, emergencies, and splurges, and you’ll be able to get the things you want and need — without stressing out and paying extra for the “privilege”.
Don’t budget for the wrong reasons
People often start a budget because they think it will help them cut back on their spending. “I can’t,” they say when invited to do something. “We’re on a budget.” Then they feel deprived and maybe a little embarrassed.
After a while, they start blowing the budget or making exceptions to reward themselves for “being good” and sticking to their budget.
Well, that’s looking at it all wrong. Sure, you may need to cut back in order to get out of debt. (Although you could also make more money.) But you’re not cutting back because you’re on a budget.
You’re cutting back in one area because you want something else, whether that’s a debt free life, a trip to Belize, or your child’s education.
When we were paying off our house, our answer to things like “Want to go to the beach this weekend?” wasn’t “We can’t, we’re on a budget.” Instead, it was “After we get the house paid off.” — because that was our biggest goal. It’s what we wanted most.
You budget more often than you realize
If you’ve never done a budget for your money, or have done one and hated it, you probably still budget all the time without even realizing it or feeling the least bit deprived. What do I mean?
Think about what you want to do over the next few days. Maybe you’re going to the movies tomorrow night with friends. Well, if someone else were to call you up and invite you to a different movie at the same time, you’d tell them that you already had plans. Maybe you’d arrange to do it at a different time instead, or cancel your original plans if you really, really wanted to attend the conflicting event instead.
The one thing you wouldn’t do is say that you “can’t go because you’re on a budget”.
You also wouldn’t feel embarrassed that you couldn’t go, or wonder what your friends must think because you were forced to say no. You wouldn’t throw your hands up in despair or whine about how hard it is to choose one movie over the other.
You’d all just go on with your life, and you’d see one of the movies or maybe do something else entirely.
Budgeting your time is almost exactly the same as budgeting your money. You can’t do everything at once, but you can do what’s most important to you. The only difference is, you can’t make more time.
Get what matters most
Budgets are about planning ahead to get what you want and need. And plans can be fun to make, because they give you something to look forward to, and it feels good to know that you’re doing what you set out to do.
I encourage you to get started if you’re not budgeting your money successfully already. (Don’t let the name put you off — it’s just another way of saying “decide what you want to do with your money.”) Take control of making sure you get what you want most.