Many of us have heard that we should follow a budget but not many of us do. A 2013 Gallup poll found that only 32% of US households put together and follow a written budget each month. Following a budget, which may also be called a spending plan, is the key to success in personal finance, no matter how much money you have or the difficulty of your life’s circumstances. But why don’t people use a budget? Here are some reasons that I have heard from clients and friends, and what I tell them about their excuses.
1. I don’t know how.
This is the most common excuse that I hear. And I would say that it is a mildly valid excuse. I didn’t learn how to budget until I was 37 because nobody sat me down and said “you really NEED to learn how to do this! This is important. Let me show you why and how.” Ignorance cost me a lot of money in this budgeting realm, and it’s why I’m committed to helping others. That is why I’ve teamed up with Liminal Space to offer a money management workshop specifically on budgeting. No excuse! If you’re navigating through a major life transition and feeling the pressure on your finances, learning now how to budget will be critical to a successful outcome.
2. I don’t have time.
If your house was on fire, you would find the time to call the fire department or at least get a hose! If you don’t follow a budget, your financial house is on fire. You cannot afford to NOT make time for your finances. If you don’t then one day you will find yourself standing in a pile of ashes and wonder where your financial house went!
3. I don’t do math.
Budgeting is not about math, especially not in this age, as there are so many great budgeting apps available that do all the math for you! Making and following a budget is about making decisions: deciding where you are going to spend your money at the beginning of the month and then deciding to follow your plan.
4. I track what I spend – that should be good enough.
Tracking what you spend is looking in the rear-view mirror. It already happened and unless you didn’t take the tag off, you can’t undo the spending you already did. Budgeting is about making a plan for your money BEFORE you spend it. Look out the front window and be in charge of your money by making a plan for it. Again, this couldn’t be more true than when money has stopped flowing in. You’ll need to wisely and thoughtful tell those dollars where to go and where not to.
5. Talking about budgeting only instigates arguments with my spouse.
If budget talks start fights, it’s because you aren’t on the same page with your spouse. You don’t agree on where you are going and/or how to get there. The money management workshop or financial coaching can help you discover what is at the root of your money fights and how you can make changes that will make budgeting a bonding tool rather than dynamite.