No Budget? How Come?
Whether I’m in a shopping mall, a parking lot or the bathroom of my local theatre, there’s always someone who recognizes me (I’m learning to pee quietly) and wants to talk about how hard it is to make a budget. This seems to be the biggest stumbling block to financial success. If they could only make a budget.
Making a budget isn’t that hard. We’re shooting season six right now, and I’m making a lot of fams do up their own budgets. And on my website I have a budget worksheet and guide to making a budget and STILL people are stopping me to say that they just don’t know how to make a budget. Really?
Course, making a budget and making A Budget That Works are two different things. I just had a fam make up a budget and when I looked at it, it looked great. They had $4 left at the end. In the positive. Perfect. Then I started comparing the budget I’d created for them to theirs. First up, the mortgage: They’d written on their budget $1400. On my budget I had $1443. Hmmm. So I asked, “How much is your mortgage?” When we clarified, the mortgage was $1443. They’re in the negative and they didn’t even know it. That means their budget isn’t going to work simply because they were too nonchalant, too lazy, too vacant to do it right. What is it about a budget that makes people think they can GUESS?
And then there are the people who can’t add. I’ve seen it over and over. When I add up the numbers, my total is different from theirs because they ADDED IT UP WRONG!
Even the idea of using a budget makes people feel like they’re putting on cement shoes. As if a piece of paper and some numbers are going to RUIN THEIR LIVES. They’ll have no fun. The budget is punishment. GROW UP!
A budget is a plan for how you are going to spend your money. If you don’t have a plan, you’re dumb. It’s that simple. Since the absence of money can be a real bummer when it comes time to buy food or pay the rent, if you don’t have a plan, you’re dumb. And there are dozens and dozens of ways that people waste money when they’re not watching were their dollars are going.
I know a family that’s barely making ends meet. They eat atrociously. They are unhappy about being poor. He smokes and drinks a couple of cups of coffee a day from the local donut shop. OMG! How can you not have the money to buy fruit for your children if you have the money to poison yourself? Just how selfish are you?
Would a budget help? Darned right! Once you’d added up the $10 a day for cigs and $4 a day for coffee, totaled it for a year, and recognized that you were wasting over $5,000 a year, it’d make you sit up and think, unless both you and your significant other were total morons.
Speaking of your significant other, one of the big benefits of a budget is the fact that it becomes the reason why you do or don’t do things. The budget becomes the control point. If you’re trying to cut your expenses, it’s easy to get upset with a partner who seems to be spending too much. Do a budget together, and if either of you can’t buy that thing you want it’s because you didn’t budget for it. You’re not monitoring each other any more. The budget becomes the monitor. And since you both agreed on the budget, getting upset with each other doesn’t make much sense.
This works. It’s one of the reasons why my fams change so much when I arrive. As an outside force, they now have someone else to blame for why they can’t spend. By the time I leave (hopefully) they’re in the habit of checking with the budget before making a spending decision.
I’ve watched peoples lives change significantly because they’ve implemented a budget and no longer have a sense of NO CONTROL over where the money is going. I’ve watched their relationships change as they move from being a “parent and child” – as in, “you can’t buy that” or “you’re spending too much money” – to two adults sharing responsibility for their family’s financial health. I know it works. If you do it right. So take the time to do it right and see for yourself.
And remember, it’ll take some fine-tuning to get your budget working just right. Like a musical instrument, it has to be tweaked as you go to get the sound just right. Don’t cast it in concrete. Let it change to meet your changing needs. Keep your eye on it, make adjustments that make sense to you both, and keep an eraser handy. And get a calculator.
July 10th, 2008 at 12:37 pm
“I know a family that’s barely making ends meet. They eat atrociously. They are unhappy about being poor. He smokes and drinks a couple of cups of coffee a day from the local donut shop. OMG! How can you not have the money to buy fruit for your children if you have the money to poison yourself? Just how selfish are you?”
Yes, yes, a thousand times yes!
This has bothered me significantly since I became a mom. How can anyone say they are poor and can’t feed their children when they are carelessly spending money on themselves? It baffles me.
July 10th, 2008 at 12:56 pm
I second that! I use to work for a coffee chain in a lower income area of the city. It was sad to see what people would spend daily on coffee - just during my 8 hour shift - and neglect other things.
I think people are afraid of a budget because it means they have to “get real” about there money and what they spend.
I budget my bills and my groceries, and savings. What’s left is spending money. I know I have to take a more careful look at my spending and leave my credit cards home. If I want something, I need to budget for it instead of grabing the credit card and saying I’ll pay if off.
I’ve started keeping all of my reciepts. I record all of where I am spending my money so I can truly be aware of it. It’s very helpful and keeps me focused on paying attention to my sending.
July 10th, 2008 at 1:24 pm
I’ve found the most useful thing we ever did was record our actual expenses in a little book with a pen and compare it against my carefully prepared excel sheet budget. Wow was I off in the beginning!
July 10th, 2008 at 1:29 pm
Here here with the recording what you spend. Actually if you record what you eat, it makes an incredible difference what you put in your mouth. Writing stuff down is a way of being accountable. People looking for cheap food can look here for 20 foods for under $1
http://www.divinecaroline.com/article/22145/52070-20-healthiest-foods–1/
July 10th, 2008 at 3:10 pm
I use an excel spreadsheet as well. Keep all my receipts and write down in a notepad anything I don’t get a receipt for. I enter the amounts on the spreadsheet which I have set up to keep a running total of $ spent in each category and how much is left for the month. It’s a real eye-opener to see it in black and white. I too was WAY off in the beginning.
July 10th, 2008 at 3:16 pm
First of all… I learned from this post NEVER to have a mouthful of food when reading Gail’s blog! I nearly choked on my chocolate caramel cookie over the peeing quietly thing! (so funny!)
Second… you are so right! You couldn’t be more right! (My husband and I have a rather modest income by today’s standards, but we have everything we NEED through living within our means, delaying gratification, and buying the needs before getting any treats).
In contrast, I have a dear friend with a family income more than ours by a few bucks an hour, and they are lucky enough to have grandma for free childcare. She always says how “lucky” I am because of my nice home and decent surroundings. It has nothing to do with luck! You see, this friend is married to a doofus, and this spouse of hers is terribly selfish and immature with the tight family money. They have 3 kids, live in borderline accomodations, drive rust-heap clunkers to and from work, and she has had to secretly borrow money from family just to keep the utilities on and food on the table. If he sees a balance in their account, he feels entitled to spend every penny (and as a result their pre-auth bills have bounced on occassion) Savings? Not a chance! It is wearing at her health with the constant worrying and uncertainty. What is the “man” of the house doing while she is struggling? He is smoking cigarettes, buying rounds of drinks for his buddies, and otherwise screwing their budget over with selfish and destructive habits!!! She tried to include him in the budgeting, but he gets angry that HE is the one that has to give up everything for the household! She tried taking away the debit cards, but he said it immasculated him not having access to his pay. He has the mentality of a toddler when it comes to money. It is so depressing to see…
July 10th, 2008 at 4:36 pm
I wrote a blog on July 1st about that being the common thing I would do when I “created a budget” for years. Rounding down my expenses, rounding up my income. now, I do the EXACT opposite when I make my budget up. So far, I’ve been very on target, with change to spare. If I’m ever off, I hope to be off on the plus side, not the negative one. And, yes, I do compare it to my actual expenses as they come out of my account, and against what the bills say, and what the company says I owe them. Usually, if I’ve over-estimated the amount by a lot, I’ll leave it that way, just so that I’m covered if there are any increases in later months.
Another thing I’ve seen, and I blogged about this recently, too; people that have expenses only once every couple of months or once a year that claim they can’t save the money monthly to pay the expense in full once it hits. Like my water bill, which I pay once every four months. I’ve taken to dividing it by four and pretending it’s a monthly expense. I figure, that way, I’ll always have that extra in the bank when it’s time to pay it.
July 10th, 2008 at 6:53 pm
the nerve of some people…on 2 accounts. seriously gail, if i spot you heading to the stall, i won’t be knocking on the door. and as a rule of thumb, never shake hands (or touch anything for that matter) in the bathroom, so not a good place for a meet and great!!!
i’ve always felt sorry for guys with urinals and all, at least we have our pants on.
i’ve worked in some less fortunate neighbourhoods and found it rather sad that you could tell by the building before going in as every balcony had satellites on them. when you go inside, i was baffled by the number of apartments with mattresses on the floor and kids in their underwear, no furniture, 60″ plasma screen TV, cable with the works, cigs, liquor and every gaming tool known to man. not all, but most. it made me want to vomit.
July 11th, 2008 at 8:56 am
In response to Tracy J. I’ve been there where your friend is at. I solved the problem by having a seperate account where the bills came out of. Unfortunatly though I ended up paying all of the bills etc. from my smaller income and “doofus” got to pay the mortgage (I set it up as a direct debit out of his account) but that was all he paid. I eventually left him and it has taken him 4 years to finally understand that he needs to pay his bills and then go buy other stuff……although I am not 100% he has learned, at least the calls from creditors have stopped calling me. Good luck to your friend Tracy J its a very frustrating situation to be in. Oh and his family thinks I have taken him for every penny and am “rich” ! LOL Oh what a budget can do for you!
July 11th, 2008 at 9:03 am
Tracy, I’m sorry to hear your friend is such a relationship. It must be very difficult to bite your lip and not say anything.
Kristin, That description is so wide spread it’s not funny. I live just outside a lower income area of my city. When you drive by that’s just what you see. Satelite dishes and you know the kids are not getting what they need. When I worked at a local grocery store it use to really upset me on “cheque day” when people would be buying the worst kind of foods for their families but have a flat of beer and a case of cigarettes too. I know not everyone on assistance is irresponsible by any means, but it’s really difficult to see people who you know are able to work and do better for themselves but are just too lazy to do so. There are so many people who really need help, while others just milk the system. When I see guys I went to school with “hanging out” in the sidewalk with their buddies everyday while I’m on my way to work, it’s hard not to get angry.
Why can’t people prioritize?
Amanda: I like your suggestion to split up the water bill. I get mine every 3 months too. I should start to do that.
July 11th, 2008 at 5:39 pm
I try to budget as many items in my life as possible. Like others have mentioned even if the bill isn’t due monthly I set aside money monthly. Since my car insurance and registration is due once a year I pay 1/12 each month to a savings account. I started this about 4 years ago and even though my insurance and registration has gone down I still pay the same amount in. The has created a cushion of money to pay for any repairs my car needs (basically my car emergency fund). Recently I have been working on a new budget since I am getting ready to buy a house. The biggest problem I have is not being completely sure how much everything is going to cost.
July 14th, 2008 at 5:04 am
I do the same as Amanda for electricity and gas (water is negligible) bills. The electricity bill is every two months and the gas every three. I always slightly overestimate them and have budgeted them so. This means I sometimes receive a bill with “No Payment Required” on it. And no, I don’t go and spend that month’s budgeted amount on “stuff”.