I’m a pretty easy-going guy, but if you happen to invite me over for dinner, and the subject of budgeting comes up, and someone offers up one of the following three excuses* for not budgeting… well, I make no promises. I’m going to get a little bit fired up.
I Don’t Spend Money.
Yes you do!
My radar goes off when I have a friend tell me that. It’s usually a sign that the exact opposite is happening. They’re really on a spending binge and don’t want to face the music.
I wish I had more to write here. This one freaks me out. Don’t say it.
You spend money.
(Expert YNABers can get away with saying things like, “I don’t spend money on things that don’t matter to me.” I like that one a lot.)
I Know Where I Spend My Money.
No you don’t. You think you have an idea where you spend your money. If you were to track the actual outflows, experience shows that you would learn a few things. Two common phrases come from the mouths of people that just start budgeting:
“I spend THAT MUCH on WHAT?!”
It’s bound to happen. Our brains can only handle so much mental math before we’re getting the wrong answer again and again.
For you many YNABers out there that dutifully track your spending? I love hearing you say “I know where I spend my money.” Because I believe you, and I know that knowledge is helping you make great decisions.
I mentioned two common phrases with new budgeters. The other common phrase is:
“I feel like I got a raise.”
Because when you start budgeting and become aware of what every dollar is doing, it changes how and what you spend. If you are following the YNAB rules, you will be forced to think through your priorities and it is through this exercise that new budgeters often realize it is easier not to spend on certain things in order to accomplish the things they really want, the things that really matter. And not spending, well, it feels like a raise. (Don’t believe me? Try it!)
Which leads me to my final incendiary comment.
I Don’t Have Enough Money to Budget.
Yes you do! If I told you that you had only six months to live, would you be more careful with your time, or less?
The same is true with your money. Acknowledging that it’s finite, even if that’s a depressing thing to do, can be very empowering! Acknowledging the reality of the situation will always lead to better decision making.
Once you begin the process of giving every dollar a job, I wouldn’t be surprised if you also felt like you’ve been given a raise.
I’m not saying it’s easy to budget when the resources are scarce. I’ve been there. It can be rough. But it is still far better than pretending those scarce resources are greater than they really are!
Don’t be caught fooling yourself with these phrases. You DO spend money. You DON’T know how much you spend and everyone, at every level of income, needs a budget. The acknowledgement of reality will bring you financial peace.
So, other than the potential of this little rant, I’m a lovely dinner guest. And Julie is an amazing cook – we’ll bring dessert!
* It should be noted that all three of these excuses have been used at least once by my mother-in-law.