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I’m just gonna get it out there, right here in the first sentence: I hate the word budget. And I hate to budget money. The word budget has so many negative connotations, it’s no wonder that most people don’t have a budget.
I call my budget a MONEY PLAN. It’s a budget and beyond. It helps me control money so money doesn’t control me.
I hate to budget, but I love to plan my money. Sure, I have to deal with the day to day, and I need to know where my money is going, but the budget part of my budget is just a part of my money plan.
Everyone needs a money plan. It doesn’t matter if you’re dead broke or crazy wealthy, everyone needs a money plan. It helps you control your money. It puts your money to work. Money gets routed to specific places for specific jobs that you create. A money plan helps you “budget” your money with purpose and focus, and its focus is the future.
So, I am going to use “money plan” instead of “budget” in this article whenever I can. It’s just a little adjustment that will help you look at budgeting in a different way.
This article is about the six reasons (excuses) people don’t budget their money. If you are reading this, you probably have one or more of the reasons working against you. And yes I said excuses, because that’s what they are.
In the end, they each feed into resistance, which stops you from moving forward. And the only way to beat resistance is to do the work. Have intent. Know that it is life changing. The hardest part of creating a money plan is the sitting down to do it. So sit down and kill resistance.
Fear is a nasty little bugger. Most of the time it is hidden, or more exactly, repressed. Sure, sometimes fear makes your skin crawl and your heart want to burst out of your chest. But most of the time it comes in other forms, like denial, procrastination, anxiety, and even depression. That beast resistance loves fear.
Before I had a money plan, I was terrified of finding out how bad I was with money. I denied the fact I needed one because feeling nothing felt better than feeling anxious, or worse. But deep down, I can admit, I was a big yellow sissy that was scared of what I would see. I was afraid of what I was going to find.
But you know what, creating a money plan made my hopelessness immediately disappear. It’s one of the best things I have ever done, certainly for my finances. Don’t get me wrong, I’ve done tons of other cool stuff, like really cool stuff, but the day I started a money plan my life changed. I know that sounds dramatic, but it’s true.
And woah, the weight that is lifted off your shoulders when you get it done! The truth will set you free! The first thing you’ll probably find out is that your money situation is not as bad as you thought it was. And even if it is as bad as you thought, or worse, you’ll actually feel relief because now you know.
Don’t be afraid! Just sit down and do the work and you will feel great that you just got it done.
This is a big one. People feel that if they create a budget they are actually creating a document that sends them to financial jail. The mere mention of a budget sends them into a scarcity mindset where there are so many restrictions life isn’t worth living. It’s so goth.
But a money plan actually creates freedom, believe it or not. You know how much money you can put to work, and you are in control. Sure, you can’t get around the basic life expenses, but you control the rest. So, I guess you get partial freedom, since you have those pesky bills to pay.
A money plan creates opportunity, too. You have the opportunity to get yourself out of trouble, if you’re in some. You have the opportunity to start chasing those dreams that always tease you. And you have the opportunity to make more money!
My first suggestion, which I wrote about above, is to rename it. Some writers call it a spending plan. I call it my Money Plan because it’s not just about spending. You tell your money where to go, which includes saving and eventually investing.
Make small adjustments at first so it doesn’t seem so limiting. Don’t try to create a new financial life overnight. Move a little money from one place to another, if you need. Have a saving goal. If you can only save a few bucks at first, don’t kick yourself. It will get better and you will save more in the future. Just know that if you try to save too much at first, it won’t happen, you’ll get miffed and quit budgeting.
Don’t quit! Give it time! You’ll lose money if you quit. Seriously, quitting will cost you thousands of dollars.
Resistance has a favorite tool and that tool is procrastination. Everybody procrastinates. It’s part of the human condition. Our desire for short-term happiness makes us put off stuff that may take a little time or effort.
Does making a money plan take a lot or time or effort? Yes. At first. It’s really not that bad, though. The setup is going to take awhile, and you are going to have to take a look back at your finances to move forward, but once you set it up the machine, it practically runs itself with very little effort on your part.
Make budgeting a habit. I spend about 5 minutes a day…well, almost everyday…in our money plan. I want to keep my money reconciled and on point. I want to know where it’s going at every moment. I want to make it work for me, so I am a diligent boss. Some people do it monthly, or each paycheck, but make it a habit to go in and keep it all together. It will save a lot of time and a ton of effort overall if you spend a few minutes here and there. Doing it monthly takes hours and it’s a pain.
Make it easy! You don’t have to have a thousand cell spreadsheet with hundreds of categories. Seeing those makes me laugh and feel sick at the same time. Keep it simple and refine it as you go. Use an app and let it do the heavy lifting.
Some great tools to help you out are Quicken, Simplifi (by Quicken) and YNAB. They automatically import your bank accounts and help you categorize. And if you are a visual person, they have great colorful graphs to help you visualize where your money is going and where you can put the extra money to work.
This one stops a lot of people dead in their tracks. They figure they don’t know jack about money, especially budgeting, and they don’t know where to start. This lets resistance settle in and stop them from doing anything. It is kind of related to fear. Fear of the unknown. It’s also hard to admit when you don’t know something.
Starting a money plan may seem daunting at first, but it is quite easy once you get the hang of it. Like I said, setting it up is the hardest part, especially since you need to look back at your expenses from six months to a year. And if you don’t make the same amount per paycheck, you’ll have to look back at your paychecks, too.
And don’t worry about the math. It’s simple and all you need is a cheap calculator. I use the calculator on my phone when I need to, but most of the time the app I use does the math for me.
Learning to build a money plan really is easy, especially when you use an app. Don’t let lack of knowledge scare you away. Take a few hours to learn it and make it a part of your life. You’ll be amazed at how easy it really is if you make it easy. You don’t need an MBA to run a money plan. You need third grade math and a desire to make sound decisions.
I almost decided to leave this one out because I kinda don’t want to touch it with a ten-foot pole. But it’s super important if you share your life, and finances, with someone else.
Money is one of the top three reasons couples disagree and/or argue. It’s a touchy subject, but one every couple has to deal with. Most couples don’t have a money plan because they want to avoid conflict. In fact, in most cases, one person does the money stuff like pay the bills, just so they don’t have to talk about it.
Believe me, avoiding money issues is a sure way to guarantee HUGE arguments in the future. A money plan is where a couple can meet in the middle.
You might have to start one on your own and then bring in your partner when everything is in order. Putting the actual plan together could create problems even before you talk about the actual money. Put the money plan together then present it to your partner.
Explain it to them, and how you got where you got. Keep everything focused on the FACTS and keep things simple! Then ask them what they think and SHUT UP! Listen to them. Focus on their needs and wants. Keep an open mind. Then let the money do the talking.
Make sure you talk about the future, not just next month’s grocery allotment. Make goals together.
I am the one who handles the day to day of our money plan. My wife checks in every once in awhile and we have a quick discussion about where things are going and how close we are to our goals. I am a very lucky man. She never wants anything and doesn’t spend money on “stuff”. She is naturally frugal. So, I never have to question her spending or make her aware of our categories. Sure, we disagree every once in awhile, but that’s natural. Just stick to the facts and work together to make your goals. Then share the happiness when your goals are met.
Some people think they are just fine without a money plan. There are couple reasons you might think you don’t need one.
“I don’t make enough to even consider a budget. What’s the point?” This is a legitimate thought, but it is an excuse. The first step towards having enough money to warrant a money plan is to start a money plan. I guarantee you will find ways to save more and make better decisions. Your money will grow. It’s the first step in turning your financial life around.
“I’m cool. I have all I want and don’t have a problem with money. I’ve got plenty in the bank and I’ll take my Porsche to go get it.” Okay, I get it, you’re super cool. But you are missing out on so much without having a money plan. You can make real goals…long-term ones…that will make your life even better than it is now. And if you do it right, you’ll make a lot more money!
I’ll keep the conclusion short, as you probably get the gist.
Chances are, one of the reasons above has been holding you back from starting a money plan. Don’t feel bad. Remember, most people don’t have a budget, let alone a money plan. Most people also live paycheck to paycheck, which is a horrible loop to get trapped in. If they only knew that a money plan is the first, and biggest, step out of the loop.
The most important part of a money plan is goals. Most regular budgets don’t include goals. Goals are the focus of a money plan. Making solid, obtainable goals and driving your money towards them is what the money plan is for.
Start controlling your money. Stop letting it control you.
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