Saturday, June 26, 2010

5 reasons people hate budgets

Do you have a budget? Yes a budget; a system that you put in place to monitor, and restrict how much money you save and spend each week, month, and year.

Personally, I’m a big believer in budgets. I’ve had one for as long as I can remember and I think they are an essential tool for reducing stress and creating a simple, more organized life.

I’m not sure why, but I come across more people who simply hate the thought of creating and maintaining a personal budget. On a list, I’m sure budgeting would rank up there with going to the dentist.

Why do some people hate the idea of living on a budget? I suspect it’s based on some past experience or just preconceived notions. The list below compiles a few reasons I have seen. And interestingly enough, these are some of the same reasons why people don’t get their homes and life more organized.

1. Accountability:

This is a biggie. Most people don’t like to be held accountable…for anything! And they certainly don’t want someone else telling them what they can and can’t do with their money (or lack of it). Accountability means limits…and those are never fun. Who wants to be limited as to how often they can go out to eat or how much they can spend on clothing each month? It’s easier just to swipe a plastic card and deal with the effects later, right?

2. Image:

Some people are just too proud to live on a budget; they feel it makes them look poor. However, I have found that the people who look rich, often don’t have a dime to their name. Look a little deeper and you’ll probably find a huge mortgage, car payments, sky-high credit card debt…and a lot of stress.

Scaling back your spending might make you look poor at first, but after a brief adjustment period, you’ll know it was the best thing you ever did for yourself and your family. Creating a budget will help you save more, build your net worth, make wise financial decisions, and get you on the path to real wealth.

3. Denial:

Without a budget, or any knowledge of how much money is available (or unavailable), it’s very easy to simply justify every dollar spent. A budget sheds light onto the true situation and forces people to take action.

Unfortunately, embracing denial only works until you lose your job, get sick, or get a foreclosure notice. Then the mess is unavoidable and undeniable.

4. Fear:

Starting a budget can be a bit intimidating if you’ve never done it before. But don’t let this stop you from getting started. It doesn’t have to be perfect. You’ll learn what you need to know along the way and in the process, you will begin to realize how you are spending your money and what needs to change

5. Laziness:

Yes, it takes effort to create and maintain a budget. However, if your budget is too much work, then you are doing something wrong. I only spend about 5 minutes a day updating my budget (yes I do it every day). It might take you a little longer when you first get started, but with all the technology available today, budgeting is very easy.

So how do you create a budget?

I personally just use Excel to keep track of my finances and it has worked for me for years. Another great resource is www.Mint.com. It is free and pretty easy to download. If you want more options (and more cost) you might want to check out www.ynab.com. It is important to find the system works for you…even if it costs you a little money. It will well worth the investment!

Organizing your finances, simplifying your spending, and living debt free are excellent ways to begin creating your best life. Start today!

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2 Comments:

Blogger Amy Melissa said...

I love budgets. I do get behind on checking on finances against it because I don't work on it as regular as I would like. I also use Excel for mine - it gives me more flexibility. I've used Quicken, Microsoft Money and Mint - I always go back to Excel.

June 27, 2010 at 1:57 PM  
Blogger Andrea Dekker said...

amy, I am all about excel...as long as you understand it! It's so convenient.
It's crazy how many people don't use any sort of budget...or know where they stand in-terms of their finances. Scary.

June 28, 2010 at 9:03 PM  

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