The typical answer to that question is an emphatic YES, THEY DO! Many times in a presentation I have asked: “How many of you have created a budget?” — most of the hands in the room go up. Then I ask: “After you created the budget , how many of you actually ever looked at it again?” — almost all of the hands in the room go down! My guess is that, as one of my ‘followers’, creating and using budgets isn’t your favorite method of managing your money? Okay, maybe I understated that: You probably think of a budget as a form of torture, right? You are not alone!
Before I get into exploring that, just in case you are worried that I’m going to end this blog suggesting that you use or create a traditional budget, have no fear! What I’m actually going to do is explain why budgets don’t work for you, and suggest some other options.
Budgets can and do work… for analytical types. You know them, they are those “logic first” people, the ones who create spread sheets and data bases for fun. They are great people. They are historians. They like looking at all the data and coming to conclusions. Good for them. If you are one of them, you probably already have and enjoy using a budget.
If you aren’t one of those analytical types, all it means is that you are not happy crunching numbers. You might be more ‘feeling’ oriented, more emotionally based. Or you might be more ‘in the moment’ than interested in history and trends. If that’s the case one of the biggest problems with a budget for you is that it’s after the fact. What I mean is that you don’t have control in the moment. You do what you do, spend what you spend. Then you come home and as you load your spending into the budget spreadsheet you have either succeeded or failed. By then you don’t really remember what your thoughts or emotions were when you were making the purchase, so you feel a bit lost. Around this point is where most people feel shame, judgement, or even some bit of failure.
And there’s the rub, the thing that makes us batty. It feels like something happened to you that you just couldn’t control because you are looking at the event before or after, instead of when it’s actually happening. That’s why it feels so upsetting. You are judging your action outside of the time when the actual choice was made. At best you have a memory of what it felt like, not a clear vision of the choice.
If you are more of a big picture, emotional and/or an in the moment person, analysis after the fact won’t actually help you change your behavior. It may make you feel bad about it, but it doesn’t give you any insights.
What will help you make better money choices is to find a way to be conscious of what you are spending—and why you are spending it—right in the moment that it is happening! Make a list of things that often motivate your choices in the moment. Things like:
- Being tired, hungry
- Feeling lonely, angry
- Wanting something new, an emotional lift, some fun
- Anxious to just get it done, settling for less than what you wanted
There are myriad possibilities, and you know what your go-to ones are. Write them on a card or note them on your phone. While you are standing in line to pay for your items, check if any of your purchases hit one of those spots? and then make a choice to either buy it or not. Understand what you are up to, make choices that truly work for you both in the moment and the long run.
A system like this, or my GOSH Model (which you can find on other blogs of mine) WILL help you be more conscious of your spending. That’s what this whole budgeting thing is truly about — being conscious, aware, and purposeful in your spending.
Focus on having your spending and how you use your money reflect what you really care about. Your money will reflect your choices.
Shell Tain, the Untangler
If you’d like to explore just how you can let go of a budget and still have sound money practices give me a call at 503-258-1630 or check out my website at www.sensiblecoaching.com.