Budgets – Heroes or Villains

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Somebody needs to figure out a four-letter word to replace the word budget because that’s pretty much how society already views it. Some people would probably rank it just one step above getting a root canal if they were being totally honest. I tend to view budgets a lot like diets. Most of us have attempted one at some point in our lives, but history is littered with the tales of epic failure and ultimately a strong distaste. If you’re reading this, chances are you probably have a few failed budget (and perhaps diet) stories of your own and maybe even a few lingering raw emotions to go with them.

There must be something good about them though or we wouldn’t keep banging our heads against the wall to try to find one that works. So, what could possibly be good about a budget? Here are two big reasons why we should be motivated to finally succeed – Contentment and Relationships.

Contentment

1 Timothy 6:8-10 tells us that “But if we have food and clothing, with these we will be content. But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.” Your budget can help protect your contentment, and protect you from this ruin and destruction. Here’s how:

  1. It helps to prevent overspending. When we have a plan, it’s much easier to win our battles. By taking the time to decide your spending in advance, you are much less likely to make impulse purchases. Anyone that’s gone to the grocery store hungry knows exactly what I’m talking about. Next thing you know, you have a shopping cart full of items that weren’t on your list because they all looked good at the time.
  2. It helps you not feel anxious or guilty about spending money. Your budget amount has already been set at a level you could afford. So, when you’re going out to eat or find yourself at the grocery store, there’s no reason to feel bad about your purchase as long as you’re staying within your budgeted amount. If something in your home breaks down, no reason to fear because your budget should be accounting for that as well. It may not be where you would’ve chosen to spend that money, but you nevertheless did plan for it.
  3. It protects you from spending more when you get an increase in income. It’s a proven fact that as our income goes up, so does our spending. Part of that reflects the fallen nature of man. Money creates a constant battle between the flesh and spirit. We can choose to indulge the flesh, but as we read in Ecclesiastes 5:10, “He who loves money will not be satisfied with money, nor he who loves wealth with his income.” A budget allows us to first be content with what we have, but it also puts a price tag on that contentment. If we’re truly content with our current situation, we shouldn’t need to spend all our new income when it arrives. Deep down inside we know stuff won’t bring lasting joy. Instead, we need to capture that money and use it for a better purpose, like giving or saving for future expenses.

Relationships

Money is one of the leading problems in our marriages. Budgets can help protect us from some of the common pitfalls that so often lead to financial tension in our relationships.

  1. Budgets help us discuss financial decisions at times when we’re not emotional or under the stress of making an urgent decision. People tend to make a lot of bad choices when they’re emotional or forced to make a quick decision. The bad choices just lead to more bad things. That could be anger from your spouse, regret in your decision, and so on. By sitting down and creating a budget before these situations arise, you can be prepared to make better choices and also know that your spouse is on the same page.
  2. It protects spouses from judging each other. It’s not uncommon for spouses to view money differently. One may be a spender and the other a saver. So often, that’s a source of stress for both of them, whether it actually gets addressed or not. The saver will feel they can’t spend anything because they need to make up for the spender and the spender feels a lack of freedom in their spending because they feel they’re always under the microscope. A budget allows you to set parameters on your spending outside of the store. These parameters take the burden off the saver because they know the numbers will add up in the end. It can also give the spender a sense of freedom because they’re no longer under the microscope with each purchase being analyzed as long as they stick to the plan.

You see, budgets aren’t these big, scary villains that come into our lives and chain us to the walls and prevent us from ever seeing the light of day or smelling fresh air again. In fact, when done properly, a budget should be the exact opposite. They should give us freedom and improve our relationships in the process. Maybe instead of changing budgets to a four-letter word, some marketing geniuses should figure out a better branding strategy to reposition the budget as the modern-day hero it actually is.

Brad is a specialist in personal financial planning issues including retirement planning, investment management and charitable giving optimization.

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