What do you think when you imagine yourself budgeting?
Do you see it as a restrictive, judging, slave driver?
That tells you what you can and cannot spend your money on
Do you see it as a limitation on your ability to have fun?
On your ability to fully enjoy your life?
What if I said it is the exact opposite of all that?
Well, letβs think of it in another way.
The other day I was heading to play soccer across town and had to get on the Interstate. For anyone who knows Atlanta, you know how it is in this town. Traffic is CRAZY!
Anyway, I was driving early in the morning, usually, there are not many cars on the road at this time (around 7:00 AM). However, on this morning traffic was moving very slowly. This was highly unusual for a Saturday morning in Atlanta. Usually, people start flooding the roads around 10:30 AM. Turns out there was construction happening on the road that morning. All the traffic lines, that usually denoted where each lane was, were gone. They have scrapped them to work on the road.
This one small change caused major confusion for drivers. No one knew exactly which direction to go.
Do we merge to the boundary?
Do we create an in-between lane?
Do we wait?
Do we continue driving like normal?
No one had one answer. Every driver did something different. Because of this confusion traffic came to a halt. Remember, there are not that many cars on the road. But just a small change in the system caused such a massive disruption for everyone.
Thankfully, traffic control show up and cleared things up with cones to direct traffic. A trip that normally takes me 20-25 mins, took me about 45 mins that morning. All because lanes were not properly marked.
A budget is the lane markings on the road for your money. It is just a guide to making sure things move smoothly. Sure, you can move wherever you want on the road go in between lanes (be like some of these Atlanta drivers) but usually, that ends in disaster. I know most of us hate boundaries, but most times boundaries are there to protect us not to impede us.
Growing up, I always argued with my mom about all the rules she had. I could never imagine how what she was doing was "good" for me. I just thought she was mean. Now Iβm a bit older and some of those boundaries she put in place, I still use them today. I understand how helpful they were.
When she said do your homework before you play. It helped me get structure in my day. Now I do that all the time without thinking about it. It helps release the stress to know when I have free time, it is truly free. Which has helped me to make my schedule work for me rather than my schedule working me.
But before I get on a whole diatribe of why boundaries can be the greatest way to experience TRUE FREEDOM.
Letβs get back on this budget thing.
Hereβs the thing, when you are driving you don't have to stay in one lane for an entire trip. You can change lanes whenever you want. If you are a good driver before you change lanes, you use your turn signal to let other drivers know, "Hey slow down, I am entering your lane."
You also donβt have to go at the same speed the entire time. You can speed up, slow down, or just cruise.
Sometimes, you have to speed up suddenly to avoid a disaster.
Sometimes, you have to slam the brakes because something drastic happened.
Sometimes, you just want to feel the power of your car so you floor it.
Sometimes, you just want to listen to awesome music with the windows down and you bumpinβ your head
It is the same with your budget. Your budget should evolve and change around your life, around your goals, around YOU!
It should not be a static document that never changes but a dynamic ever-changing document that meets your needs.
An Example
Right now, you enjoy eating out every weekend at a restaurant that costs you $50-$100 a plate.
Some people will say, "DAYUM, that is expensive. Don't do it cut it out of your budget. Think of how much money you would be saying."
I would say what does your budget say, "Can you actually afford to spend $200-$400/month eating at a fancy restaurant without sacrificing your savings and debt repayment (if you have debt)?"
If you had a budget, you would go to your budget and look for areas of unimportance to you. Maybe you see:
βWOW! I was saving for a lavish vacation but I would rather have these regular meals than one trip.β
βI spend a good amount on shopping. I can cut back on doing that and then Iβll have the room I need.β
βMan my phone bill is stupid expensive. Do I really need Verizon or can I get away with having just Mint Mobile? I can switch and save money.β
Or maybe you look at your budget and you say, βI canβt go to the fancy restaurant every weekend. But I can do the fancy restaurant, once a month.β
This is one most of us hate to hear. Maybe you look over everything and you just have to say to yourself.
βI want to make this happen but I can't go to that fancy restaurant for the moment. But what I can do is make it a part of my goals. So as I make progress and hit achievement checkpoints, I go to the restaurant and treat myself as a reward.β
Sidenote: create checkpoints for big goals.This way you can celebrate along the way. Rather than only aiming for the end.
The point is the budget gives you guidance to make the best decision for you. It also removes the guilt we sometimes feel when we spend money on things we enjoy. Rather than the things we supposedly "should" be doing. Because now you know you have a plan and you are working on that plan.
Maybe you rolled your eye while reading this and said, "Of course, you would say all the positives of budgeting. You are a money nerd, spreadsheet guy. You would be excited to be making budgets all the time."
Well, let me disappoint you and say I DO NOT have a budget.
Matter of fact, I have not used one in years.
However, I can still tell you how much I spend every month on gas, on food, on entertainment, or basically anything else I spend money on (except for when I go on vacation, all bets are off at that point).
I don't make a budget because I don't have to anymore.
I have a basic understanding of my finances. I know where and what my money is doing so I don't have to focus on it as much. Because of this, I have automated all the big decisions of my financial life. How I save, invest, pay off debt, etc. All the things that make the largest difference in our lives and give us the most stress. I donβt have to think about them as much anymore. Meaning so many stressors are gone.
Think back to the driving analogy.
If you drive, think back to when you first started learning how to drive. That was probably the most nerve-racking and the frightful thing you could do. It took all of your concentration just to drive around a parking lot with no one in it. However, after you drive for a certain amount of time your mechanisms become automated. You don't have to be hyper-focused.
You can listen to music, podcasts, etc.
You can talk on the phone or have conversations with others in the car.
You can eat and drive.
Everything you would never have thought of doing when you first started driving, now you do them without a thought.
It is the same with a budget.
This is not a forever thing that you do for the rest of your life. It is a guide to get you on the right track, to set you on your path. Once, you have it down. You will be able to automate everything and not have to think about it much, if at all.
But just like when you are driving and it begins to storm or itβs foggy, we all do the same thing.
We turn down the music
Hands go 10 and 2
We sit up in our sits
We do all that so we can be fully focused on the road.
It is the same with our finances. There are certain times we will have to go back to making a budget to make sure we don't stray off course. Or maybe we need to plan a new course because life is changing.
So a budget is not a NO STATEMENT.
It is YES STATEMENT.
For the things that you value and you choose.
Not for the things that someone else decides.
So start saying YES MORE and create the life you want to live.
Thank you for reading.ππΎ
I hope you all have A WONDERFUL week and weekend. Go subscribe to Rambling Mind Podcast for more personal finance and investing thoughts. You can also catch me on TikTok, Instagram, and YouTube every day.
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God bless Each and Everyone of yβall
βπΎ