Confession—I was one of them. I was an excuse-factory when it came to budgets. I didn’t write a household budget for the first ten years of my adult life. Bills were getting paid, groceries were getting purchased and I was making a regular 401k contribution. It wasn’t until the *)# hit the fan that I had to write a budget-to see if everything was going to get paid after a layoff. I had no idea if my unemployment check was going to cover the expenses.
To this day, I shake my head in wonder—how did we do that? Everything seemed fine. But it wasn’t.
Let’s explore the biggest budget excuses, and confront the reality attached to them.
1. I Don’t Have Time
If you don’t have time for budgeting, you likely also don’t have time for assessing your retirement plans. Or going to the dentist to make sure you have enough teeth to eat that Alpo with. Because that’s where you’re going to be in a few years when your retirement isn’t covering it. Fact: It takes an initial investment of time (perhaps 2-3 hours) and about an hour a week to maintain a budget. After that, each week it takes less and less time as you get practice. I now spend under 10 minutes a week on my budget and it works perfectly. Put down the remote and just do it.
2. I Have A Variable Income
Perhaps my favorite tried-and-true excuse. “I can’t budget, I have a variable income, so I never know what is coming in.” Fact: You’re the grown-up here. Control something. If you can’t control what is coming in to your household, have a handle on what is going out—budget your expenses. We’ll explore how to budget on a variable income in the near future.
3. I’m Not Late on Anything
That’s nice. It’s your lucky day. Fact: If you’re not budgeting, you don’t know how many days your household could run without an income. If you lost your job tomorrow, how long could you go before you got behind? You might not be late on something—but are you on time, or ahead on your savings goals? Without a budget, how do you know? College? Retirement? I wasn’t late on anything in 2009, but I would have been out of debt five years earlier if we followed the same budget that we do now when we started out in 2003. Five years.
4. I Don’t Have Enough Money
I’ve heard this one a few times. Fact: Nice try captain cop-out. Any money—small or large needs a plan! See item #2 in this list.
5. I Have Too Many Bills
Having “too many bills” overwhelms many people. It’s understandable, but not an excuse not to budget. Fact: Sometimes your resources may not cover all of your needs, but you still need a realistic picture of where you’re at. Pay bills in order of priority, and work to cut costs, but keep track of the items that are going unpaid. Sooner or later those will wake up, and you need to have really good records to go about settling and paying them. You also need to know what it takes to close the gap. Would a part-time job do it, or is there a bigger problem? A complete budget will tell you what you need to know.
6. I Don’t Know Where to Start
That’s fair. But not starting your budget, isn’t a solution. Welcome to adulthood, grasshopper. Fact: Start at the beginning. Bust out our debit card and credit card receipts and your checkbook ledger for last month. Categorize to the best of your ability and then create a budget based on that for your first attempt. It takes about two hours.
7. If I Have A Budget, I Can’t Be Spontaneous
Sometimes it feels that way. Fact: You can be much more spontaneous with a budget—you have short term and long term un-designated savings, as well as a monthly line in your budget for fun money. You just have to be reasonable about your spontaneity, and you cannot allow our spontaneous nature to cannibalize your future financial security. (There’s a fine line between spontaneous and foolish—know which side you’re on!)
8. I Write Budgets, And Never Look At Them Again—What’s the Point?
Well, the point is to use your budget. Fact: If you can’t be disciplined enough to look at your budget again, design it in a way that requires less maintenance. I don’t like frequent check-ins with the budget, so I use the envelope system. Every week ¼ of the budgeted spending money goes in an envelope. Nothing more gets spent. If the envelope is empty, you stop buying stuff. It’s virtually foolproof.
9. I Want To Have Fun–A Budget Means Living Scorched-Earth
Some people think this way. I can’t understand it. Fact: I’ve been on a very strict budget since 2009. Living on a budget can be very fun. I’ve vacationed and traveled, my kids have gone to camp, and we go out to eat, or to the movies. We have fun because it’s part of our budget.
10. What I’m Doing Now is Working For Me.
It’s true until it’s not. Fact: If you don’t have a budget, how do you know your current program is working? You don’t.
Ok folks—your turn—what are your favorite excuses? Let’s help one another bust the myths.