There are two kinds of people in the world: those who budget and those who don’t. Actually, I’m sure that’s a much-too-simple view of the world. But let’s pretend it’s true for the moment (at least while you read this article).
Anyway, the point is, for most of my life I was one of the “Non-Budgeting People.” When I was kid I understood the concept of a budget in an abstract kind of way, like “Oh yeah, there are spreadsheets and calculations and you write down numbers to make sure your money does what it’s supposed to.”
I always figured I would start budgeting eventually, but in between all the life events that happened as I transitioned from being a kid to a teenager to a young adult, I never made that leap to using a budget. And I now realize why that was.
I think what stopped me from becoming one of the “Budgeting People” sooner were the following two and half mistakes:
Budgeting Mistake #1: Believing that being frugal is the same as budgeting
I’ve always tried (usually with some degree of success) to be frugal. At least in the sense that I always did a good job avoiding any purchases that I didn’t really need and finding the less expensive way to do something when possible.
For example, if I had a choice between buying a brand name pair of jeans or buying one from the discount rack, I’d go for the discount rack. And I certainly never tallied any thousand-dollar bar tabs or anything. So I figured I was doing pretty well. But the problem is that even if you’re being frugal, when you’re not tracking your spending, it’s still easy for money to slip through the cracks.
As it turned out, once I finally started budgeting, I noticed that too much money was being taken up by certain things, such as eating lunch out during the workweek. Only after getting serious about budgeting (not just frugality) was I able to identify some of those unnecessary expenses and start eliminating them.
Budgeting Mistake #2: Thinking that you have to be perfect to budget
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I used to think that budgeting meant accounting for every cent and never spending a dime on something you weren’t “supposed to” purchase. Since that seemed like an unattainable standard, I figured maybe budgeting wasn’t for me. If only I had learned then that budgeting is helpful precisely when you aren’t able to be 100% disciplined.
You can actually include a category in your budget for “fun” or “unexpected” things. And even if you go over your budget each month, you’re still better off knowing why – it gives you the power to change your habits over time and eventually take more control over your finances. In other words, I eventually realized you don’t have to be perfect to be a successful “Budgeting Person.”
Budgeting Mistake #2.5: Assuming it would take lots of time to budget properly
I’m counting this as only half a mistake because it ended up being partially true. I used to assume that budgeting would take up so much time that I would get fed up with it and never stick with it. I envisioned countless hours staring at a computer screen, entering numbers and decimals into a mind-numbing spreadsheet.
Instead, once I finally got around to trying a budget, I realized it doesn’t take that much time or effort. When you first start, there is a certain amount of time commitment necessary to go through and write down your expenses and then to push yourself into the habit of writing things down regularly.
But ultimately, that doesn’t take very much time, especially after you get in the habit of doing it.
And I guess that’s why I’m now happy as a “Budgeting Person.”
What about you?