The word Budget gets a bad rap.
When most people think the word Budget, they think cheap and inferior. We all hear the ads talking about "budget phones" or a "budget car". The word budget usually has a negative stigma attached to it.
I felt the same way for a long time. This was coming from a number-crunching-desk-jockey who spends his days working in Excel. I had zero desire to create a budget spreadsheet to manage our finances.
Once I found my Why when Addie was born my wife and I finally got on a budget. While it wasn’t easy at first, the thing that clicked for us was when we redefined what a budget really is.
Looking back, there were some misconceptions that I had that prevented us from budgeting for a long time:
Budgeting is too Complicated
In the past we tried and failed several times to budget using Mint and an Excel spreadsheet. I went over piles of receipts and tried to keep track of each transaction. Reconciling every purchase to a budget category just never really worked for us.
Budgeting doesn't have to be that complicated.
There are so many programs that make budgeting easy. You don’t have to be a math nerd or Excel wiz anymore. Some of these apps even link to your accounts so it automates a lot of the tediousness of tracking your spending. There’s Mint, Personal Capital, or my favorite YNAB. With YNAB I’m able to look at and update my budget anytime, anywhere.
Budgets are Restrictive
I used to hate the idea of budgets because I felt that it showed me what I couldn’t buy.
Nowadays I think the complete opposite.
In a previous post, I’ve written about how my wife and I buy whatever we want. Some of our more recent big purchases that we've done recently:
- Christmas gifts - $1400
- iPad Mini 4- $350
- PlayStation 4 - $250
- Home Upgrades - $2000
- 2015 Preowned Toyota Camry - $19k
As long as we take care of our important expenses first (bills, savings, investing) we don’t feel guilty buying random crap every now and then. I just spent $30 on a John Cena ugly Christmas sweater. Once you decide what’s important in your life, you figure out how that fits in your budget.
Budgeting is Too Time Consuming
Anytime people tell me they don’t have time to budget, I tell them to think of all the times they mindlessly look through Instagram or Twitter each day. Now replace ONE of those times with a quick glance at your Personal Capital or YNAB.
Was that so hard?
Yes, I know that looking at your budget isn't as exciting as seeing vacation pictures from your old high school friend who you'll never see again.
While managing your budget might take some time, it doesn’t have to take THAT long. Most people spend more time deciding what to wear than they do on their budget.
Once we set up our categories in YNAB, maintaining our budget probably only takes at most a half hour each week to reconcile accounts. At the end of each month, my wife and I look at the past month and plan out the next month in our budget. This takes about 10 – 15 minutes.
We Didn’t Need a Budget
My wife and I made decent money, so we didn’t think budgeting was necessary. We owned a home, were debt free (except for a mortgage), and had enough left over to have fun and spend on whatever we wanted.
While we were pretty successful without budgeting, we could have done so much more.
By not budgeting in the past, we were basically “winging it” when it came to our money. Which basically meant we were playing it by ear when it came to our future.
The Truth About Budgeting
Budgeting isn’t about what you can or can’t buy, it’s about living the life you want. My wife and I want to retire early, go on vacations, and pay for our daughter’s education.
In the past I assumed that by working towards these goals we would be sacrificing fun in the present. Getting on a budget has helped prioritize our spending so that we could actually DO BOTH. I just maxed out my 401k, my daughter's college fund has $12k in it, and we paid down our mortgage $60k in two years.
I've never been more optimistic about my family's future until I became a budget nerd. :)
Guest Blogger Vic L. is a self-proclaimed "budget nerd" and proud of it, as he should be. Talking about money is difficult, confronting your own finances is frightening, but Vic's easy, honest, and fun approach make it more than tolerable. He makes it DO-ABLE! For more great financial advice for everyday folks, like ourselves, subscribe to his blog Dad Is Cheap - Fatherhood, Money, and Everything in Between and/or follow him on twitter @DadisCheap.
This Guest Writer was hosted by blogger Julie Guardado. Read her BLOG here!