Why Doesn’t Budgeting Work for Me?
There comes a point where many of us decide that we should budget. Our finances aren’t going well, and we all know that budgeting is a good idea. So, we decide that we should give it a try. But we don’t get terribly far with it & quickly abandon it. Why? The first reaction is that we just need more information. If we truly knew the tricks of budgeting, then maybe we’d do it. But, while there are a couple of “tricks”, those tricks only amount to ways of keeping track of our spending more efficiently & using third grade math. And frankly, we have the internet & YouTube available if we were really interested in learning some of those tricks. I’ll post a blog on “how to budget” next week, because although knowing how to budget is important, that isn’t the main reason that we don’t budget.
The reason we don’t take the time to budget or stick to a budget is that (1) we don’t see the big picture, and (2) we have mindsets (what we think & believe) that cause us to avoid making positive changes.
Nobody budgets because they like budgeting. My wife and I have been budgeting every month for 20 years, we’ve gotten really good at it, and we still don’t like doing it! A budget isn’t the end goal. The end goal is the results of budgeting. In other words, we budget because, by budgeting each month, we get to live the life we want to live.
So, if we want to budget, we have to first stop and think about the life we really want to live. Not boiler plate goals. Not what our parents or friends or social media tell us. We really must stop and dream for a while. If you got your finances together, and paid off all of your debt, what type of life would you start living? Maybe you’d like to quit the job you hate and start your own business. Maybe you’d like to purchase a home. Maybe you’d like to have a spouse stay at home and raise the kids. Maybe you’d like to be more generous. Maybe you’d like to travel extensively & enjoy some great experiences. Maybe you want to invest in your children. Whatever dreams you have, if they’re truly a priority, and they’re something that you are committed to make happen, then you will be willing to budget. It’s the difference between telling yourself “I should start a budget” vs. telling yourself “I really want to achieve my dreams, so I have to budget!”
The next thing that prevents us from budgeting, and can also prevent us from dreaming, is our mindset. Simply said, mindset is what we think and what we believe. Without realizing it, we tell ourselves stories like “It’s too hard, I can’t really do it”, “I work hard, I deserve nice things” (that I financed). “Nobody in my family ever achieved anything, and so neither will I”. “Only rich people can be successful with finances”. “The system is against me”. “I need…. (fill in the blank with something that I want, but don’t really need)”. Also, budget specific mindsets, such as “I tried budgeting & it doesn’t work”. “Budgeting only works if you have a lot of money”, etc. And then, the Mother-of-All negative mindsets….. the dreaded perfectionism. If it’s not perfect, then it’s not worth continuing. Last night I heard a young singer describe her battle with perfectionism. She was unwilling to put out music that wasn’t perfect. Consequently, she didn’t finish the songs she was writing and, when she did, she didn’t put it out for people to listen to it. Why? Because it wasn’t perfect. It’s scary putting out something that has flaws! It goes without saying that you can’t be a professional singer if you don’t finish songs and release them. It also should go without saying that we can’t be successful at budgeting if we expect the budget to be perfect, and abandon the effort when it is, in fact, not perfect. The only way to truly fail at budgeting is to not do one.
So, in order to change our mindset, we need to first identify our negative mindsets that are preventing us budgeting and working towards the life we want. We should also identify the positive mindsets that we have. Once we’ve done that, we need to have a strategy for changing our thinking and develop ways to redirect ourselves when these negative thoughts reappear (and they will reappear). We also need to accentuate and use our already positive mindsets.
A big part of what I do as a Financial Coach is help people dream about the lives they truly want to be living & identify their positive & negative mindsets. Without dreams and without a new positive mindset, it’s really difficult to work up the energy to budget. And, without a budget, it’s very difficult to live the life that we dream about.
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