Budgeting Allows You to Spend MORE – The shocking truth about budgeting: it doesn’t mean you need to live under a rock. It will help you find money you didn’t even know you had!
This is a guest post by Erin of View From Our Terrace.
When I talk to people about budgeting, those that don’t have a budget cringe. They say that budgets scare them because they would have no money to spend.
The truth is, you have the same amount of money whether or not you have a budget.
Seems pretty logical, right?
The problem is that when you don’t have a budget, you may feel like you have more money because there is no accountability in place. You may set limits on yourself when your bank account starts to dwindle, but you still probably spend money on whatever you feel you need or want.
But then you don’t always have money for the items you actually need. This is when you end up racking up debt on a credit card or dipping into savings.
That is where a budget can help!
Still wondering how I am going to convince you that a budget will allow you to spend more money? It all starts with changing your attitude towards budgeting and your money.
You prioritize your expenses.
YOU and you alone get to prioritize the expenses in your budget. Think about what is important to you, set goals, and make your money work for you and not against you.
If you want to buy a house, travel to Europe, get regular pedicures, send your kids to private school, or pay off all your debt, that is up to YOU to decide.
A budget will only help you achieve these goals by setting limits on where you spend money and allowing you to focus your remainder money towards these goals.
Without setting specific goals, you may never achieve what you want, or it might take a very long time. You might spend a very long time telling yourself you can’t afford what you want, while still spending money on unnecessary things that don’t even make you happy.
Budgets are flexible and can change and adapt to your current lifestyle.
If you are one of those people who is adverse to budgeting and skeptical to how it can help your finances, consider how a budget can be a powerful tool to help you.
Life is always changing. Your life will most likely not look the same in a year from now as it does today.
Maybe today one of your favorite hobbies is clothes shopping, but you always feel guilty about the money you spend. If so, I would strongly suggest creating a category for that (or whatever your guilty pleasure may be) in your budget and finding the right balance between how much you can afford to spend this month on clothing and how much you will realistically spend. It takes practice, of course, to find the perfect balance, but in the end, you will feel much less guilty about spending the money if you already planned to spend it.
Fast forward a year from now and you just bought your first house!
While you may feel cash poor at the moment due to the overall expense of purchasing a home, the reality is that you will need to buy things for your new house. You may need to put a stop on your clothes shopping budget (or at least reduce it), but now you can adjust your budget to afford the new items you need for your new house!
If you had kept going with your spending habits and without a budget, you may never have felt like you could afford to buy a house, let alone have money to spend to furnish it.
Related post: 11 Expenses to Stop Spending Money On
Your emotional relationship with money will improve.
Unfortunately, many people think that they cannot create and follow a budget because it is all about numbers and math and that “number stuff” is not for them. Budgeting is much more about your emotional relationship with money.
Finally taking control of your finances and deciding that you are going to figure out how to make a budget work for you is half the battle.
The rest is accepting the amount of money you have to work with at the moment and figuring out the best way for you to make that amount work for you and your goals.
Once you accept what you have, set priorities, and make plans to meet your goals, you will feel so much better about your money and finances. Once you feel better about your money, you will feel more comfortable spending money as well.
Related post: 10 Habits of Highly Frugal People
Are you ready to create a budget?
I used to sit and stare at our budget in my spreadsheet and tell myself that if we just had more money, everything would be solved. The truth was, we were not prioritizing our expenses or allowing our budget to be flexible. We tried to do too much with our money all at the same time. Once we let ourselves pick and choose where our money would be going each month, our whole outlook on our situation changed. Our emotional relationship with money improved immensely.
We found ways to cut expenses that we did not care about. We reallocated money that was not working for us. Then, we prioritized our expenses and remembered that we could change things in as little time as a month.
That was when I really noticed the change.
I cannot tell you how amazing it is to go to the store and shop for clothes, a fun new accessory for the house, a new toy for my daughter, or go out for ice cream and feel ZERO guilt because I know that we have money set aside for that exact expense. These are all expenses that I would have felt guilty about spending money on in the past as I did not deem them necessary.
These items may not be necessary to survive, but they sure do put a little joy back into life. We may spend more money on some of these items than we have in the past, but that is okay because we feel more confident and happier about our financial situation with a budget in place.
Get out there and get started on your budget or pick up where you last left off. Make those financial goals a reality by setting priorities and coming to terms that a budget is there to help you, not hurt you.
Related post: How to be a Financially Successful Woman