The idea of creating a budget turns people into TSA Agents because they are not letting that get through the gates into their life, even with a thorough pat down.
Budgeting carries negative connotations because it is restricting and difficult (like eating healthy food and exercising regularly, another awful thing smart people suggest).
We don’t like doing hard things. So of course budgeting is something we are absolutely not interested in.
I know a lot of very smart people who seemingly handle their finances well that don’t use a written budget.
They say things like,
“If I had a budget, I’d spend more money than I do now.”
“We’re very frugal and we definitely don’t need a budget to manage our money.”
“A budget is constricting, like an anaconda wrapped around an armadillo.”
I can see where they are coming from. But I disagree for a number of reasons, listed below. As promised, the budgeting myths are body slammed with enough force to put the Kardashian’s on a cash-flow plan.
I feel especially adept at answering these objections because I’ve reasoned with the false logic behind them myself in the past.
8 Budgeting Objections and the Real Truth to Answer Them
1. Budgets cause you to spend more money than you normally would.
Saying you’ll spend more money on a budget is like saying you’ll gain weight on a healthy diet: it’s possible, but if it happens you’re doing it wrong.
If you realize you’ve allotted too much money in a category for the month, you simply adjust for the next month and put less money in that category. If you budget $400 for groceries but realize you can make it spending $350, don’t just throw that $50 away–save it this month and adjust the grocery budget to $350 next month.
Truth: Budgets help you spend money better.
2. It’s easy to make wise financial decisions without a budget.
If you just paid your 6-month car insurance bill, the Christmas season just came and went, and then you bought plane tickets to visit a family member, you’re probably thinking you can’t eat for a few weeks.
However, if you methodically save for each of those irregular expenses, you’d realize you’re in fine financial shape. Budgets allow you to predict the future and make decisions based on your current situation instead of perceived realities.
Truth: It’s impossible to make solid financial decisions without a budget.
3. You’ll give more generously without a budget.
If you aren’t planning how much you can give, you are going to give less than Scrooge McDuck because of unexpected expenses. The same logic that applied to spending wisely applies to giving generously.
You just paid the rent, bought a TV and went out to eat last night, so when your friend presents an awesome opportunity to give to her cause du jour, you throw some loose change into her cup because you don’t think you’ve got the room in your faux-budget to give.
If you knew exactly how you were spending your money, you’d see the opportunities you have to give more, and be more prone to take the chance to give when it arises.
Truth: You’ll give less if you’re not on a budget.
4. I know exactly where all of my money is going–I don’t need a budget to tell me what to do.
One of my favorite stories from the budgeting king Dave Ramsey is about a guy who was in his 60s and realized he and his wife weren’t saving enough for retirement. When Dave asked him why, the man said,
“We don’t have a retirement fund because we’ve been eating it.“
The man and his wife were spending hundreds of dollars each month at restaurants, so they hadn’t saved much for retirement.
Without a budget, who knows what fund you’re eating.
Truth: You’ll be constantly trying to figure out where your money is going if you don’t have a plan.
5. I can tell how well we’re doing based on our bank account.
Without attaching categories to how you’re spending each dollar, you can become emotionally attached to how much you have instead of how that money should be spent.
It’s pay day? Go crazy, the account is (relatively) sky high!
Pay day isn’t for two weeks? You’re eating rice for the next 42 meals.
If you designate how every dollar you make will be spent, you’ll have a constant, truthful financial picture.
Truth: You won’t have an accurate financial picture without a budget–a written plan.
6. Budgeting takes too much time.
It’s true, there is some initial start-up time in budgeting. I’d say if you get really in-depth, a super thorough budget could take a couple of hours if you don’t have easy access to pay stubs, debts and recurring bills.
But! Once you create your first budget, I’d say budgeting takes a maximum of 30 extra minutes per month to do well. You tweak a few things for the month ahead, and if you want to budget like a boss, you’ll go to the bank to withdraw cash that you’ll use for every purchase.
Is a half hour a month–6 hours a stinking year–really what is keeping you from setting yourself up well for the future?
Truth: The time spent budgeting is time you’ll get back when you’re able to retire before you’re wearing diapers again.
7. My wife and I can’t agree on purchases. A budget would make things worse.
If you and your spouse can’t agree on purchases, budgeting is going to save your marriage, not ruin it.
You need to be on the same page as your spouse or you are headed for destruction. The number one cause of divorce in the United States is money fights and money problems.
When you sit down and make choices together, both spouses can feel the freedom to spend, give and save toward things that are important to them.
Truth: Budgeting increases marital communication and practically eliminates the number one cause of divorce.
8. I don’t want a budget to keep me from doing things I want or buying things I want when I want them.
That’s called living in denial. If you are just throwing things you want on a credit card all willy-nilly, you are wrecking your financial future, and, if you can’t pay the bills, you’re a cheat.
Part of putting on your big-boy pants means participating in delayed gratification. You save for things you want, make wise choices, and then you get to enjoy the fruit of your restraint.
Truth: Budgeting allows you to do the things you want at the cost of sacrifice in the short-term for long-term benefits.
Wrapping Up
Remember, “If you fail to plan, you plan to fail.” It applies in life and especially money.
Convinced? Here’s a link to get started on your best budget ever.
Our excuse is… Discipline and habit. Can’t really add too much more.
One of the best things we did before getting married. Coming from such different backgrounds on money, this was great to help us get on the same page. Well said, babe!
A budget is a plan nothing more. Maybe if we dropped the “budget” word and just called them money plans more people would be open to it. With anything, you have to know where you are going and how you are basically going to get there. Plans can and do change, but unless you have one you will never get anywhere.
Thanks for being such a great teammate in this with me, sweetheart! I completely agree. Budgeting together gave us a huge headstart in marriage.
Mike, I think you’re right about the word “budget.” It carries a ton of negative connotation. I completely agree with you. And without a plan, we’re likely to end up somewhere other than where we were hoping to head. Thanks for your input.
Hutch, it’s tough to get into the habit of it. I try to break things down into smaller blocks to form a discipline. It takes time but it’s possible if you start small.