It’s 9:00 pm on a Thursday night. You have a 8:00 am class tomorrow morning, and there will be a midterm worth a third of your grade. You just sat down at your desk to study, and your phone buzzes. There’s a house party down the street, and three of your friends invited you to come hang out. What do you do?
One of the most common misconceptions about budgeting is will no longer get to have any fun, and that is a complete lie. Creating a budget is not meant to stop you from getting what you want. It is a plan to help make the best decisions for you.
Here are some excuses I’ve heard and the reasons you should ignore them.
Budgeting Prevents Spending
Haha…no. I teach my clients the zero-based budgeting process. With the money you plan to have coming in next month, I want you to plan to spend every dime. It is how you spend the money that makes all the difference.
With spending, I don’t mean only bills, food, or fun. Saving money is another way to allocate your money each month, so “spending” your income to build an emergency fund or increase your retirement savings is still a good choice.
Spend all your money each month, but spend it to help reach your goals.
No More Fun, Ever
I also teach my clients to budget in some fun each month. If the budgeting process isn’t enjoyable, you won’t keep doing it. It’s like having a diet with a cheat day, or going to Starbucks only once a week. Treats are good, but too much of a good thing creates problems.
Here are some ideas of what I mean:
- Instead of seeing all those Marvel movies in IMAX, wait for Redbox.
- Buy a bag of Starbucks coffee, and make it at home.
- Plan your next vacation as a staycation.
There will come a day when you are out of debt, have an emergency fund, and have enough money going into your retirement savings each month. When this happens, you’ll have hundreds—if not thousands—of extra dollars each month to enjoy and spend on yourself.
Stick to budgeting, and the fun will keep growing.
I’ll Have to Give Up Something
Going back to our “study or party” decision, there will be tough money choices. There’s never enough time in the day, and it often runs by quickly. On the other hand, money seems to keep going when we are allowed to use credit cards and other forms of debt.
By sticking to the zero-based budgeting method, you are limiting yourself to a certain amount of money for the month. When you start to handle money this way, there are going to be items that are more important to spend your money on.
I have found, when working with families, these decisions become easier and more enjoyable. When you start budgeting, you start to think about your goals and dreams, and monthly budgets help you get what you want. The more important goals in your life start to win.
I have had clients lose weight because they started cooking at home more to save money. And we’ve all heard of smokers who quit because they couldn’t afford the price of cigarettes. Budgeting each month makes these decisions much more rewarding.
The exam tomorrow morning only happens once, and there will always be another party. Avoid FOMO, and make the right decisions for your future.