This three part series of articles was originally written by Christa Hudak in November of 2017.
Truth be told, I am kind of an odd duck. I actually like to budget and I always have. There have been times when I did not like what I saw, but I have always liked to budget. However, I know this is not the case for most people. In fact, for a lot of people the idea of budgeting or reviewing your finances brings with it emotions of fear, anxiety, embarrassment and even sheer panic.
I understand that not everyone is wired to be a neurotic budgeter like myself, but I do believe it is critical for everyone align themselves with a basic budget. I want to share with you why I love budgeting.
Budgeting gives me freedom
I know that this seems backwards to so many who struggle to live by a budget or who never have, but I feel I have freedom in my finances because I budget. Sometimes I wonder if budget has become a dirty word and it may be helpful to think of it as a monthly financial plan. Frequently, people start to budget because they recognize they need to spend less and so the budget becomes about spending as little as possible in each category. Sometimes that is the reality of life, but it is a problem if you are never able to graduate from this perspective.
To help you understand how budgeting gives you freedom, I want to lay out a scenario for you. You and your spouse both work, you have decent incomes but there never seems to be enough money at the end of the month and you have fallen into the habit of carrying a balance on your credit card. Your major expenses seem reasonable but you know all the little things are adding up in a big way. Your vice (because it is a budgeting stereotype) is coffee. You grab at least one latte every day, sometimes a second if it has been a rough day or you feel like you need a pick me up. The problem is, as your finances have started to get out of control you have started to feel guilty about this habit.
If you able to actually develop a budget with your spouse you line out all your general expenses and make some categories that make sense for how you live and your priorities. All of your expenses will be allocated into one of your budget categories. One of the categories you decide is that you and your spouse each get a “Fun/Discretionary” category, which is for each of you to spend on whatever you want. After thinking about it, you decide this is where the money for your lattes comes from. By having this category, it gives you the freedom to enjoy the pleasures in life, but also a cap on what you have decided is reasonable. You may or may not be able to get a latte every day, or you might decide to skip the lattes for a week so you can go out to lunch instead. You are now able to be in control and make these choices guilt free.
