What's in your budget?

The dreaded B word.  Most people hate it.  I hate it too.  I hated it so much that I, like many others, avoided it for a LONG time. 

Humans have an amazing capacity for changing their perception of reality.  Taken to the extreme you end up with someone who thinks it's perfectly normal to eat the mailman's liver with fava beans or is always looking around corners expecting to run into either hobbits or stormtroopers.*  But often we can use this part of our brain to alter reality just enough to actually HELP us!

Try this... think of the word "Budget".  What comes to mind?  Deprivation? Frustration? The mental image of an authoritarian parent saying "No!" like you would scolding a dog for peeing on the carpet (rolled up newspaper optional)?  Perhaps you see chains and shackles and a lifetime of being on the outside looking in?

Ok... erase those cold dank images and instead think of the words "Spending Plan".  To me, I start thinking of things like having a list of fun items and going from store to store to store (often skipping - which I never really do), checking them off one at a time.  Usually with a big grin on my face. 

Guess what?  In real life, the words mean the same thing!  It's our perception of the words that is different.  That's why I use a SPENDING PLAN instead of a budget.  A Spending Plan means that I can take all the money I earn in a month and have a plan for it.  I know where each dollar is going to go before I get it (and if I get more than I planned, I have a plan for it too).  If you don't PLAN where each dollar is going to go, trust me, those dollars will find a way to go somewhere... and quicker than you can fathom.  If you don't plan for your money, your money will find a way to disappear all on its own.

Dave Ramsey says money is fluid.  It comes and goes and there's no sense in trying to hang on to it.  Think of it like water.  If you take a handful of water and squeeze it tightly, trying to hang on to it, it just runs out of from between your fingers.  If you just sit there with your hand open, eventually it will evaporate into nothing.  But if you take that handful of water and put it into a glass... that's a plan.  You can add to it (grow your water... aka saving)... your can drink it (spending) or you can give it to someone else (giving). 

Some people LOVE to plan.  They like lists and enjoy playing with plans to see what the best plan is.  Others... sometimes it's easier to teach a baby calculus than getting them to sit down and go over finances and planning.  But the fact is, if you want to improve your financial position and change your life for the better, you HAVE to plan.  Call it dreaming, call it planning.  Figure it out.  Don't expect to be perfect the first time, but make an honest effort.  Every dollar in... equals a plan for that dollar.  Every dollar.  Every month.

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"Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." - Will Smith