Jake over at iHeartBudgets had a great post the other day titled Go Spend Your Money PLEASE! The point of the article is that a good budget should not feel limiting. Instead, it should give you the freedom to spend your money the way you actually want. In other words, it helps eliminate waste so you can focus your spending on the things you truly value.
I couldn’t agree more with this sentiment, but I don’t think it’s an easy place to get to. Not only can making and tracking a budget be difficult, unfamiliar and daunting when you first start, but it can also feel extremely tedious and even suffocating as you look at your spending in a new light. So how do you get past this initial struggle and find the point where it actually feels freeing? I think it all depends on how you start.
The typical advice for starting a budget
The typical advice usually goes something like this:
- Start with all of your regular monthly bills, like utilities, rent/mortgage, cell phone, cable, insurance, etc.
- Add in variable expenses like groceries, gas, car maintenance and eating out.
- Add in…blah, blah, blah.
Are you pumped up! Yeah, me neither. And I think that’s part of the problem. By looking at it like this you’re focusing on the depressing things first. We all have to pay our electricity bill, but no one gets fired up about it. If anything, thinking about it probably just reminds us that we’d like it to be lower, and then we start thinking about all those times we left the lights on while we were gone, and then we’re feeling guilty and bad about ourselves before we’ve even gotten past Step 1. No wonder it’s hard to keep going!
My suggested alternative: starting with passion
Rather than starting your budget with the bills you have to pay, why don’t you start with the things you want to use your money for? Maybe you have a weekly date night with your spouse that you want to make sure you have room for. Enter that first. Maybe you’re saving up for the house of your dreams. Or maybe you’re starting this whole budget thing because you’re finally motivated to start saving for retirement. Put that savings amount down before anything else.
If your end goal is for your budget to allow you to spend your money how you want, shouldn’t you start your budget with the things you actually want to spend your money on? Doesn’t it seem a little bit crazy to do it any differently?
The benefits of this approach to budgeting
There are two main benefits that I can see from this approach.
First, you’re starting from a place of excitement. I can’t emphasize the importance of this enough. If you can clearly define why you’re doing something and are excited about it, you are much more likely to follow through. And without follow through, the whole exercise is pointless..
Second, if you start with your bills, entering those items will feel like a statement of fact: this is what you have to spend. But when you have already considered the things you WANT to spend on, you’ll be much more likely to think about the subsequent items as opportunities to cut back so that it’s easier to spend on your priorities. You’ll have tricked your brain into thinking of ways to make your required spending fit around your desired spending instead of the other way around. If you can do this, you’ll probably find a lot of areas where your “required” spending really isn’t all that required.
A good budget helps structure your life so that your regular spending habits keep you right on target for the things you truly care about. It’s freeing in that you remove the guesswork from your daily spending decisions, which allows you more leeway to spend money on the things you want. Getting to that point isn’t always easy, but if that’s your end goal, why not make it your starting point as well?
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