13 Reasons Why
Even the smartest, most organized people don’t budget – for many different reasons.
I recently had a conversation about a convinced non-budgeter and I was faced with quite some resistance from his side. Here’s a recap of all the reasons I have heard from people who don’t budget:
- My income is the same every month.
- I have different income/expenses every month.
- I know my expenses, I don’t need a budget to tell me what I spend money on.
- Budgeting is for people who cannot handle their money (overspenders)
- I don’t see the point in budgeting.
- How does that even help my finances?
- I am not disciplined enough to follow a budget.
- I don’t know how to budget.
- I don’t have time to budget.
- I don’t have enough money to budget.
- I have enough money, I don’t need to budget.
- I cannot budget because my expenses are different every month.
- I find it demotivating.
I have heard them all. And we are going to demystify them all.
Most people make a budget a terrible chore, something they should be doing.
You should not budget because you need to. You should budget because you want to.
As I told you in my previous post, I like to budget nowadays. I actually enjoy it. But that wasn’t always the case.
“My Income is the Same Every Month.”
Great! You know exactly how much money comes from your paycheck… one less thing to worry about! Now just split the money in digital ‘envelopes’ and allocate amounts to your expenses. Tadaa, you have a budget.
Even if you’re income and expenses are the same every month, a budget helps to set goals for where you want to cut back or what you want to save for.
“I Can’t Budget Because My Income/Expenses Varies Every Month.”
Another big mistake is that people believe a budget is something that needs to be the same every month, that it is a repetitive, fixed things you need to follow.
My friend told me he travelled a lot for his work, so his expenses were very irregular so there was no point in having a budget.
A budget gives you a clear plan for your money, no matter your income.
He made very good money, but he had to advance a big chunk of his travel expenses, so he ran out of cash towards the end of the month. Because he didn’t have a budget.
If you have variable income or your expenses somewhat unpredictable, you can take a lot of guesswork out of your money by making a budget.
I find it very comforting to know exactly how much money I have in my account at any time and what I’m going to do with it.
My budget gives me a lot of control and clarity, no matter what I make or spend.
A friend of mine owns a car that needs fixing all the time, so he was facing constant ‘unpredictable’ garage bills.
Guess what, you can budget for unpredictable stuff aka. emergency fund.
I don’t have a classic emergency fund. Instead of having a fixed sum saved for rainy days, I like to budget specific amounts in a category, so I am okay when something comes up, like repairs, contractor bills, or a flat tire. I budget for all of it.
My money is my gate dog to keep Murphy away from my doorstep.
“I Know My Expenses, I Don’t Need a Budget.”
The point of having a budget is not (solely) to know what your expenses are. People think a budget is just for the bills, the rest is disposable.
I also know my fixed expenses by heart, to the penny. And I still have a budget.
You can identify savings potentials, OR start budgeting for your wants, not just your needs.
As mentioned before, I budget for ‘unpredictable’ stuff but I also budget for my dreams and future purchases like a new handbag, vacation, down payment for a home or a wedding. I treat them like monthly expenses and save a certain amount towards things I want. That way, I make the best out of my disposable income.
That is so much more fun than just paying the bills!
Your dreams become reality if you make them ‘tangible’ by putting real money on it.
“My budget never works.”
“Why bother? I know I don’t have enough money left for the month. I don’t need a piece of paper to tell me that.”
When I first started budgeting, a few categories were constantly underfunded, and I was in the red for a few months straight. My expenses were higher than my income. But my budget made it work anyway.
The best thing: I knew exactly where my deficits were, so I could prioritize so much better. I became more creative and motivated to do something about it. I always ‘found’ the money somehow.
It was not my budget that was not working. A budget can help you go through a ‘scarce’ patch so much smoother because you have so much awareness and clarity and can make better decisions.
Instead of indulging in self-pity and moan about it, your brain goes to work and finds ways to solve that problem.
Just start, it won’t be perfect the first time.
“Budgeting is for People Who Can’t Handle Their Money.”
A budget is not for people who are ‘bad’ with money or chronic overspenders to teach them discipline. People still think a budget is for poor people.
Yes, a budget can help identify your spending habits and weak spots.
But: Every company and government has a budget. A budget is just a tool/system to allocate resources to specific purposes.
“I Can’t Stick to My Budget.”
OR: “I am not disciplined enough to follow a budget.”
Reallocating resources (=money) is not failure. Most people think a budget is something they need to stick to no matter what. I like to think of my budget as a roadmap of where I want my money to go.
It is not meant to be restricting. You can decide on purpose where your money goes. And you will get so much better at it with time.
A good budget is flexible.
If you find your budget restricting, budget money specifically for fun things like shopping, going out or buying yourself fresh flowers. Yes, I budget for that. I do it with purpose instead of guilt.
“A Budget Makes Me Feel Bad.”
People see budgeting as a form of self-torture and restriction.
I personally have found immense freedom in budgeting.
To me, a budget is a permission to spend.
If you experience buyer’s remorse or guilt when spending money, a budget can help you improve your relationship with money.
Instead of seeing spending as a ‘sin’ or deviation, you can purposefully allow yourself to spend money by making a decision about it ahead of time, which, in turn, gives you your power back. You develop leadership and authority in regard to your money instead of feeling like falling victim to your impulse.
This is very important! It puts you in the driver’s seat of your money.
You can budget for impulse and spontaneity. That’s where you find true freedom with your money.
A budget is like a calendar. You tell yourself ahead of time what you are planning to do, so you are less likely to deviate.
“How Does That Even Help My Finances?”
Many see budgeting as a pointless exercise in just documenting their spending. I never found a lot of joy in looking at my past spending and just seeing it as an array of mistakes and regret. But it was also very insightful.
Although I know every penny I spend every month, I have quite the eye opening moments when I analyze my spending as a pie chart for the entire year and see how small expenses accumulate over the year to quite a pile.
A budget helps you become better in managing your money. You get in the habit of developing solid habits of spending, saving, paying off debt and investing.
A budget is a form of practiced attention and consistency with your money. That is the basic step in becoming better at anything.
You will learn to see money as a tool and how to use it to your advantage.
“I Have Enough Money, I Don’t Need a Budget.”
Isn’t it amazing when you are in a position to have enough money for all your needs and then some?
Budgeting is not just for when your money is ‘limited’ and you have to be careful with your spending.
You can budget a few months ahead (one of the best features of YNAB in my opinion). People think they have to ‘do’ things with the money they have left over. That’s not true.
You don’t have to BE on a budget to have a budget.
I love to see all my categories well funded.
Budgeting is just a way of organizing your finances and making decisions ahead of time. I have a gained a lot of confidence with my money because I have built trust in my decision making over the years.
To me, financial freedom means just that.
“I Need to Be Flexible.”
Know the problem of treating your savings account like a checking account?
People put money aside and then have to transfer it back because they have overspent somewhere.
What makes YNAB so awesome is that you have your money in ‘silos’ or ‘envelopes’. You know exactly what you are saving for and how much you have available.
Since using YNAB, I have rarely overspent because I knew exactly how much I had available and never had to touch my savings account because my budget told me exactly where my money is.
A budget gives you the flexibility you need to reallocate your money anytime without having to transfer cash around.
“I Don’t Have Time to Budget.”
I literally need no more than 10-30 minutes to do my monthly budget and if anything changes, I can do that with my app on the go.
Personally, I find budgeting an enjoyable task. It’s my way of spending time with my money and make it part of my regular money ritual.
“I Don’t Know How to Budget.”
In the simplest terms, a budget is a system to manage your money you have available. It is just a tool or system.
Budgeting is easy: you write down all the money you have and put it to work in an expense category. You give every dollar a job.
You can budget on a simple piece of paper, a spreadsheet or use an app. Personally, I totally elevated my budgeting since using YNAB.
I find it very rewarding to know where I have money left over after budgeting. I can then pour some more into savings, make extra payments on loans or investments. It helps me save money for particular purposes like trips, birthdays or a new iPhone. I can see all my accounts in one place and know exactly where my money is and what I want to do with it.
YNAB is my favorite budgeting app that works seamlessly on desktop and mobile. Learn more here.
My Budget Is My BFF
A budget is not just a money tracker. I find that budgeting has more benefits than downsides.
Budgeting is something you can do on any income. I know very wealthy people who have a budget because they see it as an opportunity to be intentional with their money.
My budget keeps my spending aligned with my goals and lifestyle. It gives me clarity, control, intentionality, freedom and peace of mind.
Do you budget? Why or why not?