The number of people who don’t have or follow a budget is astounding. In fact, a Gallup poll found only 32% of Americans maintain a household budget. That means that nearly 70% of the country is not aware of their money situation in a given month. My only guess as to why this is the case is because people don’t know how to budget and their intimidated by the sound of it. For some reason, budgeting seems scarier than it is.
I always ask potential clients if they have a budget, and what their reasoning is for not having one. A majority respond with a lack of knowing where to start. This lack of knowing ends up making budgeting sound like a scary concept…similar to investing.
I want to shed light on budgeting and help as many people as I can understand that it is such a critical component of financial success. Let me start by addressing why budgeting seems scarier than it is and how to break free from the fear!
Why Budgeting Seems Scarier Than It Is
#1 - People don’t know what budgeting is
I touched on this above, but I truly believe people make budgeting scarier than it should be because they don’t know what it really is and how to go about doing it. If that’s the case for you, I have some good news. Budgeting is actually simple! Let’s start with the basics.
What is budgeting? Budgeting is the act of creating and maintaining a budget.
What is a budget? A budget is simply a tool that tells you what money is coming in, what money is going out and what money is left over.
That is it. When you hear it in those terms, budgeting doesn’t sound so bad, right? 😊 I’m sure you’re nodding your head in agreement. A budget is not some scary, sacred thing that sucks your energy. It’s simply a tool to help you understand your money. When you understand that a budget is only there to help, and the action behind it is your own, it makes it a lot less intimidating.
#2 - People associate negative thoughts with the word budgeting
Another reason people make budgeting scarier than it should be is because they have negative thoughts associated with the word budgeting. Thank you, society.
Unfortunately, there is a stigma around budgeting, having a budget, and being “on a budget”. I’m fighting everyday to break that stigma! The most common negative associations I hear from potential clients about budgeting are:
“A budget means I can’t have fun”
“I don’t make enough money to even justify having a budget”
“A budget is too time consuming”
These phrases and many more are why people don’t like the thought of budgeting. These thoughts need to be looked at and analyzed in detail, because they are so far from accurate. Let me elaborate:
“A budget means I can’t have fun”. Understanding what a budget is (just a tool), how would a budget stop you from having any fun? Your budget may show you that your income doesn’t cover all of the fun things you want to spend money on, but that’s not your budget’s fault.
“I don’t make enough money to even justify having a budget”. Going back to what a budget is (a tool), it really doesn’t matter how much or how little you think you make. A budget just tells you what money is coming in (income), what money is going out (expenses) and what’s left over (profit). That means a budget has nothing to do with how much you actually make.
“A budget is too time consuming”. While I do believe budgeting does take a commitment of your time, if you don’t have enough time to put into it, how important is financial independence to you? If you can’t dedicate any amount of time to improving your situation, you obviously don’t want it that bad.
#3 - People think budgeting is what controls their spending
People make budgeting a bigger deal than they should because they associate the act of budgeting with how they spend their money. Guess what? It’s you who controls your spending, a budget just tells you what to spend.
You can choose to follow your budget or not follow your budget. You are the one in control. The budget just gives you the framework to follow so that you can make sure your priorities are covered and your goals are being worked on.
When you start to think of budgeting as a tool, a guide, a framework, or a path to spending, you can take the intimidation factor out of it. Budgeting is the act of creating and following a budget. A budget is a tool that tells you what money is coming in, what money is going out, and what’s left over. This concept makes the process so much smoother.
#4 - People make budgeting a bigger activity than it is
I’m not going to lie to you. If you have never created or followed a budget before, it does take a bigger commitment in the initial stages. Sure, it starts off heavy, but becomes much easier through regular maintenance. I’ve been budgeting for over a decade, and every month when I create my next month’s budget, it’s a breeze.
Don’t let the initial start of budgeting scare you off. You must have this starting point if you eventually want to be successful with managing your own money. Understand that it will start off a little heavy, but also understand that it will get easier as you get used to it.
Easy Ways to Start Budgeting Now
Now that you realize budgeting isn’t as scary as everyone makes it seem, you can start moving forward with budgeting! I want to share a few easy ways you can start budgeting right now.
#1 - Have someone create it for you
They don’t teach budgeting in school (unfortunately), so you can’t blame yourself for never learning how to create a budget. However, that can’t be the excuse forever. There are plenty of services out there (including City Girl Savings) that help create budget plans for you!
One way to get started with budgeting is to have someone create a budget plan for you to follow. I would highly recommend this if you have no clue where to start and really don’t have the time to research. Schedule a free consultation with me or start the process to have me create a budget plan for you.
#2 - Use an app or software (YNAB, Mint, EveryDollar)
Another way to get started with budgeting is by using software designed to help people create and stick to budgets. YNAB, Mint and EveryDollar are a few of the most popular apps and programs out there. They are available to everyone, but may come with a fee.
#3 - Block out time to review your spending and create your own budget
Finally, you can get started with budgeting by just starting! Block out time on your calendar (at least 2-3 hours) to review your spending and come up with an initial budget based on your review. If you have the time, I think this is a great option because it helps you see firsthand where you stand.
Start by reviewing your spending and account statements for the past few months. You’re just looking to see where your money has been going. Ask if you want your money to keep going to those things. If you don’t, map out where you want your money to go in the future. This will take some time, but it’s worth it!
If you need assistance with creating or sticking to a budget, it’s my specialty! Schedule a free consultation with me and let’s get you set up on a plan.
Related: 6 Ways Budgeting Changes the Game
I hope that I have been able to break some of the stigmas you have around budgeting. It’s such a powerful practice to help you get a handle on your money. It’s only scary if you let it be scary! When you hear the word budgeting, what do you think? Do you have a fear of budgeting or managing your money? Post a comment below to share some of your thoughts and experiences!
The CGS Team