Relief from Ambiguity
Posted by Ken | Filed under Ken
We, here on Other Voices certainly extoll the effectiveness and necessity of living by a budget. Still, I can’t help but feel that the message has a negative edge to it. “Start coupon-ing! Cut your cable! Haggle! Negotiate! Gird yer loins!”
Just kidding, y’all.
I’m convinced that people look at the way I budget in the same way that I look at Vegans: “It’s a lifelong commitment, a complete lifestyle change that’s massively restrictive, not to mention terribly inconvenient.”
No doubt, you vegans out there tell your friends that the lifestyle isn’t that bad once you get used to it. I find myself similarly reassuring people when it comes to living on a budget. And yet, there is still resistance. Naturally.
We don’t like the idea of being policed by a budget. We get comfortable in our dysfunction. We don’t prioritize time to address our finances. We fear trying and failing. Whatever the reason, we humans tend to be short-sighted and focused on immediate gratification.
So why do I do it? Why do I so readily embrace a lifestyle that causes people’s palms to sweat? Why do I live on a budget?
I do it because NOT living on a budget was slowing me down. The inefficiency of my pre-budget life meant that I was perpetually preoccupied with rectifying the past (stuck in a debt-loop). Life on a budget allows me to enjoy the present while simultaneously preparing for the future.
Mindy Crary, a CFP® practitioner/financial coach who contributes to FORBES, made a key observation in her article “Why I Hate Budgets and 5 Reasons They Don’t Work “:
“…I started paying attention to my higher net worth clients. I realized they were all doing some kind of budgeting. Sure, some of them were making truckloads of money, but they knew exactly where it was all going.”
“I also noticed that the people who were struggling, or who were trying to figure out how to pay for the things that they wanted, like vacations, remodels and other big ticket items generally had no idea where their money went. It actually didn’t matter how much or how little their incomes were, I started to see that lack of budgeting created an ambiguity in their entire financial situation.”
Mindy had not lived on a budget before becoming a certified financial planner (frightening) but picked up on this trend among her clients.
The “ambiguity” that Mindy points out could not have been more prevalent in my pre-budget life. I was constantly procrastinating on saving and turning down fun opportunities because, for all I knew, I couldn’t afford them. I wasn’t basing my decision on any kind math or any concrete evidence. I had arbitrarily slotted myself into the “Can’t Afford It” mindset, avoiding acting on responsibilities and opportunities
My budget completely clears up any financial ambiguity. I know exactly where all my money is going. I cover all my savings and knew exactly whether or not I can afford something. Where I used to budget my spending down to the penny, lately I’ve been into the idea of buffering my monthly incidentals with some money for “Guilt-Free Spontaneity.” If I don’t spend that money by the end of the month, I carry it over, save, or invest it. It’s not much, but it’s nice to know that it’s there.
So in an effort to take the edge off of the concept of budgeting, I want to celebrate the spontaneous guilt-free purchases I’ve been able to make this year:
- Volleyball tournaments (I play Middle)
- A dresser for my bedroom (furniture I desperately needed)
- Theatre tickets (American Idiot, In The Heights, Avenue Q)
- Legitimately-acquired computer software (pricey and yes, I pay for it)
- Misc. Car Rentals (because it’s nice to get me out of the city)
All this while increasing my saving, investing and watching my net worth climb. I celebrate these purchase, not to brag, but to show what proper budgeting made possible. It sounds cliched, but if I can do it, then so can you.
If you don’t currently live on some sort of budget, do yourself a favour: liberate yourself from ambiguity. Don’t pass up opportunities because you don’t think you can afford it. Your budget is the key to getting what you want out of life.
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