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Successful Budgeting is All in Your Head.

| August 24, 2018
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How You Think about the Process Is Key Determinant of Success

Most people hate the idea of “Being on a Budget”.  The very term implies some kind of failure.  That there is failure in not having enough money to do and have whatever you want whenever you want it.  And of course, “Being on a Budget” implies that you are depriving yourself of things you want, right?  

Wrong.  If you think about budgeting as a form of depriving yourself, you will surely fail.  Human beings are not good at depriving themselves.  Just look at how few people successfully lose weight on a diet, or how few are able to successfully start and maintain an exercise regimen.  With the negative fews so many people have regarding what budgeting is – it’s no wonder so few people proactively manage their money.

I had a friend the other day who complained that, while he had a goal of running in a triathalon, he was a terrible runner (one of the three tri events).  “I HATE running” he explained.  My comment was when he goes out next time just keep repeating to himself  “I LOVE running.  It feels so GOOD to get the blood moving.  I feel so ALIVE!”  Self delusion?  Maybe – but I was serious, because it worked for me.  When I started running a half dozen years ago, this is how I got through the pain and overcame the inertia that wanted me pinned to the couch.  Eventually, the little mantra started to become my truth.  I started to feel better about running as my body became stronger.  I now enjoy my thrice weekly runs, and have completed two half marathons. 

Well, thought patterns are critically important to managing your cash flow as well.  Let’s look at a few ways of changing your thinking which can help you keep your spending in check. 

ELIMINATE THE THOUGHT “I/WE CAN’T AFFORD IT”. Get these words out of your vocabulary.  In reality, you probably CAN afford whatever it is you are considering.  Replace the thought with “I’D RATHER…”   For example, instead of “We can’t afford to go out to eat tonight” try on “We’d RATHER use that money to (pay down debt, save for college, put in a vacation fund, etc.) – so we’ll have a budget meal at home instead.”  Shifting the thought from one of deprivation to one of empowerment keeps your head in the game.  You are now in charge of your budget – the budget is not in charge of you! 

I LOVE BUDGETING! BUDGETING LETS ME AFFORD THE THINGS I WANT.  BUDGETING GIVES ME SECURITY.    Just like my little running mantra, it may feel like self delusion at first.  But just as with my running experience, as you start to realize the benefits – it will become your truth.  My wife once thought the word budget was a four letter cuss word.  She is now enough of a believer that she helps other people get their cash flows under control.  As with running, it takes a little practice – but eventually you will feel more secure, better prepared for emergencies, and better able to achieve your goals. 

STOP TELLING YOURSELF YOU ARE NOT GOOD WITH NUMBERS/MONEY. Think about what is involved here.  It is nothing beyond 5th grade math.  Most of budgeting is simple addition and subtraction.  Telling yourself you can’t manage a budget because of the math is nothing but an excuse to go back to your old behavior. 

KEEP YOUR BIG GOAL IN MIND. I started running because it keeps me healthy.  My health is important to me, so I exercise.  Which of your financial goals motivates you?  Financial security?  A dream vacation?  Early retirement?  Freedom from debt?  Whichever financial goal makes your heart sing should be the one you bring to mind when it is time to do the monthly budget. 

TAKE THE STIGMA OUT OF BUDGETING. If you think budgeting is something only poor people do, your subconscious ego will resist.  But I suggest that all my financial planning clients should be on a budget!  The largest and richest companies in the world operate a budget.  Why?  Because it helps them make decisions about priorities.  Would we rather invest in a new factory, or pay dividends to our stockholders?  For a wealthy individual – would I rather spend $20,000 on a dream vacation – or help pay my grandchild’s college tuition?  The choices you face may be a little different – but the budgeting process is the same.  Budgeting isn’t something POOR PEOPLE do (if they did, they might not be poor!) it is something SUCCESSFUL PEOPLE DO. 

If you need help learning strategies to getting your budget under control, give us a call.  Our Certified Financial Planners / Financial Coaches can help you find the best approach household budgeting, from good old cash envelopes to modern smartphone apps.  We can then help coach you through the learning process as well.  

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