Want to start a fight? Tell your wife that it’s time to go on a budget. You can almost see the hackles start to rise. It’s really too bad that “budget” has become such a negative word, because there’s a lot of power in a budget.
Let’s change gears for a moment – what do you think of when you see the word “diet”? If I said, “It’s time you started a diet,” you’d probably have about the same reaction as if I suggested you start a budget, right? I’m here to tell you your first reaction is wrong. “Diet” and “budget” are very neutral words that are getting a really bad rap.
The reality? We’re all on a diet. Your diet is what you eat. Literally – go look it up. Similarly, we’re all on a budget – our budget is the sum of all the money we earn, and all the money we spend. The problem is, that left to our own devices, we’ll choose a diet that takes in more calories than we burn, and we’ll choose a budget that spends more than we earn.
The negative opinion we have with “diet” and “budget” come not from the fact that they exist (because we all have them), but from our intention to exercise them with discipline. Discipline is hard. “No discipline seems pleasant at the time, but painful. Later on, however, it produces a harvest of righteousness and peace for those who have been trained by it.” Heb 12:11
At the heart of the matter, we all have a budget – but the financially responsible have a budget that they set ahead of time, and the financial zero has a budget they struggle to determine after the fact. It’s not even necessary that your budget be positive (look at the last four years for the government of the United States for an example), just that you have a plan, and that you monitor your progress against the plan. Do just this, and you will find that you control your money, rather than the other way around.
If you’re not budgeting, don’t worry – it’s easy to get started, and once you’re under way, you’ll find that it’s easy to continue. There are really only a couple of steps:
Month one: Keep track of the money you spend, and the money you earn
Month two: Based on spending and earning from Month one, plan this month’s spending and earning.
Month three: At the end of Month two, measure what you actually earned and spent. Compare to your plan (your budget) and understand where they were different. Then make a plan for Month three spending and earning.
What you’ll find if you go through this process is not that you have to set tight limits on how or where you spend your money, but that you will understand, as you are spending it, whether or not it fits in your overall budget. In other words, you will automatically develop discipline around your budget, just by understanding where your spending and earning are coming from. You’ll also, by the way, feel a tremendous release of stress as you realize that you are in control of your money, and not vice versa.
It takes a few months, but it’s really this easy. Make it a monthly habit, and it will stick with you the rest of your life. And the really good news is, once you’ve got this mastered, you can take on something much more difficult – like sticking to a diet.