Say you or your husband lose your job tomorrow. Catastrophic loss, emotionally, financially. Will it make a difference if you are in the habit of budgeting, if you have learned to budget your resources and save what you can or pay down your debts?
Creating a budget is like creating a birth plan. All the planning in the world cannot ensure that something unexpected (wonderful or horrible) won’t necessitate emergency overriding of your expectations and desires, but that doesn’t mean that planning is valueless.
Everyone’s budget is going to be different. For some people, having an emergency fund is all-important. For others it’s important to give their kids the kind of childhood they dreamed of. Some people have debts from school or house or car or a bad housing decision or comfort trips to Disneyland. Some people earn a lot of money, some people scrape by, but a budget can help both of them.
A budget has to be flexible: you plan for as much as you can, but then someone needs a root canal or the housing market plummets or — you lose your job, and then, no matter how carefully and smartly you have prepared, the budget has to change, and maybe it even changes for the better, because after months of looking you find a job even better suited to you or you lose money on your house but decide it was worth it to move your family to a safer neighborhood.
Having the budget, the very day-to-day act of practicing self-reliance helps you think about things more carefully, even if it turns out to be unnecessary — what if you win the lottery some day and never have to worry about money again? Would the budget be of any use?
Sometimes you change your budget because the things that used to be important no longer are, or you realize that you have a crazy dream you need to start saving up for.
Everybody’s budget is different, but there are some sound financial principles upon which anyone can build, and there are some unscrupulous get-rich-quick hucksters who will try to sell you the Brooklyn Bridge. There are advisors you can trust, and there are people you would give anything to have by you in case of disaster, or to celebrate with you when you buy your dream cottage.
But here’s the thing: although I know a budget is a good thing to have, I don’t. Sure, I try not to spend too much, but I’m not as frugal or mindful as I could be. A budget isn’t really necessary to my day-to-day peace, or to my vision of the future. I get along just fine without it. I have friends who would be appalled at my apathy, my ability to shrug it off and say, sure, I should do that, but it doesn’t really compel me right now. And the sky hasn’t fallen. If my husband lost his job tomorrow, I doubt I’d think: this is all my fault, if only I’d had a budget! But probably, if we did go through an experience like that, the first thing I’d do with any money coming in was make sure it got budgeted wisely. (or — take off for the Riveria, you know, whichever.)
Subscribe by email
I’d rather have a caesarean than stick to a budget.
Jane Reply:
March 4th, 2010 at 6:28 pm
l-o-l.
Yeah, yeah, we should have a budget too. We tried it once but all it really turned out to be was a way to track what we spent, not manage the spending. I think it is definitely a good idea to spend less than you make (not a common practice) so if budgeting helps you do that, go for it. If you can do that without thinking twice, more power to you!
But surely most people only have a budget because they HAVE to.
I mean, if our family had enough money for everything that we needed/wanted, then I certainly wouldn’t be wasting my time and energy on budgeting! If we got it, we spend it. If we haven’t then we budget (and still spend it!).
Jane Reply:
March 5th, 2010 at 10:27 am
Maybe, but I think some people (shudder) find it fun, makes them feel more in control, like seeing how much they can save with coupons, enjoy watching the debt shrink, etc. Maybe?
(I’ll continue my hunt for the perfect metaphor. ;p Like I could stop, anyway.)
Carolina Reply:
March 5th, 2010 at 1:03 pm
There are people who find it fun (ugh), and I’m married to one (think pie charts, spread sheets, financial forecasts, etc.). But I am happy someone likes to do it!
I think this is the perfect analogy you were searching for. Almost everyone should budget, but not everyone does. And just because you fail to plan, it doesn’t make you a bad provider/mother. And we still love each other anyway, right? Perfect.
Jane Reply:
March 5th, 2010 at 10:46 am
Right.
Oh phew, I’m glad I’m not the only one. I try and I try…and I fail then I fail. sigh.
As you know we have been super budget crazed in the past. We even managed to pay off 28,000 in IRS debt over 18 months. And then we kind of relaxed a bit. I still keep and update a weekly budget that rolls into the next week ect ect ect. And I can tell you how 5 dollars I spend today will effect my bottom line in December. So… maybe we are still a little crazed. We got into budgeting to get out of debt (only have the cars left to pay off… woo hoo) and wound up getting so much more. Most of which is peace of mind.
That being said. It is a pain to update weekly.
I don’t know if I do the whole “budgeting” thing as far as determining how much money we spend on this or that, but I am a fanatic about saving. I’ve saved part of every paycheck I’ve ever gotten, first because my parents forced me to, but later because it helped me sleep at night. The idea that my family might be in trouble and might have to do without things they need, is not something I can handle.
It’s not as hard as you might think. On my first job, I set aside $25 in bonds from each weekly paycheck. That’s not enough that I would miss it, but it adds up fast. In two years, I had $2,000. After I left that job, I left those bonds to sit for 10 years. At the end of that 10 years, I had $7,200 – enough to pay for my son’s first year of college.
[...] My own personal brand of heroin: the Analogy (The only way I could get my friend Tara to understand why anyone would think it important to learn about natural childbirth (and want to convince others) was to compare it to having a financial budget. Something that she does, very well, and something that I haven’t (so far) been bothered to do. I told my mom it was like caring about where your food comes from (some people do, some people don’t) because she was reading Barbara Kingsolver’s Animal, Vegetable, Miracle last week). I told my husband that it’s like the difference between hosting and tweaking your own WordPress blog and being content to use one of Blogger’s default themes with no widgets.) 3-04-2010 [...]