At some point or another we’ve probably all been told that we need to keep a budget. If you’re like many folks out there your first reaction might not have been one of sheer excitement. After all, we all know that budgets are simply a way to keep us from getting what we want, right? Nothing more than a ball and chain in the guise of a spreadsheet! OK, I’m sure that if you’re reading this you know a little bit more about budgets than that. But practically many of us still shy away from having too strict of a budget because we feel encumbered by them to some extent. So folks may say “I’m saving money and not running low in my account, I’m OK without a budget”. I see that comment online quite often. There’s also the classic “I’ve got more self control than that” line that I can’t help but roll my eyes at, and probably deserves an entire post unto itself… But there are many aspects to a budget that aren’t necessarily obvious. Here are a few that resonate with me.
A Few Benefits Of A Budget
- Accountability. How many times have you spent way too much money in an area of your life and immediately regretted it, even as you were continuing to spend. How many times have you arrived at the end of the month and thought “where did it all go?!” Or looked back over a year or more and wished you had been more disciplined? The ability to set rules for yourself and live by those rules creates a certain level of personal satisfaction. To be able to look back and say “I accomplished my goals and here’s the proof” is a great feeling.
- Tracking. As the old cliché goes, you can’t know where you are going until you know where you have been. Having the capability to look back at how we’ve spent our money in the past can powerfully influence our decisions about how to plan to spend it in the future. Thinking of having a baby, changing jobs, or moving locations? Having that kind of month over month and year over year data can be a huge help.
- Freedom. This cannot be overstated! Without having a handle on how you’re spending your money it’s like having a cloud hovering nearby you all the time, causing you to second-guess your decisions and make those decisions based on a feeling instead of fact. There’s definitely a sense of freedom that comes through being able to look at your available budgeted funds and make a simple, informed, and mostly correct decision with no consternation or second-guessing.
- Communication. As I like to tell my wife, the numbers don’t lie! I say that as much for my own spending habits as hers, but being able to sit down and look at the numbers together is huge for us. We can encourage each other in areas of overspending and high-five each other in areas we manage well. We can hold each other accountable to the goals that we have as a family and as stewards of what we’ve been blessed with. There is a TON of value in having great communication when it comes to finances.
Just Get Started With A Budget
Budgets can be maintained in many different ways, and there are several methods to choose from. For years I maintained my budget through Quicken, which I might label an “In Hindsight” budgeting tool. About a year ago I switch to You Need A Budget, which is not as well known as Quicken but is gaining in popularity for its “Envelope Method” of budgeting. There are many folks out there who make use of Mint.com, which is one of the easiest to get started with, and still others who simply use pen and paper, or an Excel spreadsheet for this exercise. The key is getting started with something.
Yes, there’s some work on the front end to get started, but I encourage you to give it a try. Don’t get too hung up on the budget amounts for the first few months, just track the way you usually spend your money without changing your habits. Then, as you see categories that fluctuate you’ll naturally begin watching those areas to see why that’s happening. I’d love to hear your stories about your budget, whether recent or a history lesson. Let’s encourage each other to be good stewards with our money, even if budgeting is not your cup of tea.