As far as experiences go, most humans consider the task of preparing a budget as slightly more enjoyable than root canal and not quite as riveting as standing in the queue at a Clicks pharmacy. Tomes of evidence exists to prove that people who run monthly budgets are more in control of their futures, spend less recklessly, succumb to impulse shopping less often, are less likely to be duped by advertising campaigns, generally have emergency funds in place, have less debt and are more positive about their futures than people who don’t. And yet, despite the mass of evidence in support of the humble, but ever-so-powerful budget, we avoid it like a mall at month-end.
With consumers the world over seemingly in the grim grips of austerity, the mere mention of the word ‘budget’ only serves as an unwelcome reminder of their fiscal realities. The word ‘budget’ seems to imply something less – less freedom, less fun, less quality, less happiness and a lesser lifestyle. Many of us equate the word ‘budget’ with the inevitable tightening of the belt, restricting of spending, down-scaling, doing without luxuries and somehow living a poorer quality of life. Preparing a budget should be the punishment of the reckless spender, the innumerate masses or the unrehabilitated shop-a-holic, not so? Being forced into a position of succumbing to the agonising task of preparing a budget means one has somehow reached financial rock-bottom with the noose of debt tightly wound around one’s neck, and the only glimmer of light at the end of the fearfully long fiscal tunnel is the down-right demeaning task of preparing a budget.
Countries, governments, companies, trusts, schools, charities and churches the world over run and operate perfectly respectable budgets, but it appears that the lesser favoured personal budget doesn’t receive the same deference. Whilst some may blame it on an aversion to numbers, it seems more likely that the real reason we avoid drawing up our personal budgets is because, well, it’s personal. It’s about our lives, our children, our partners, our lifestyles, our choices and our futures. Budget aversion is less about the fear of facing financial reality and more about emotional trepidation at the possibility of having to make life-altering decisions having had the bottom line bared.
While many may prefer to claim ignorance over their monthly spending habits, immunity from the consequences is unlikely. And though ignorance may be bliss for some, the euphoria is generally short-lived. Despite the recklessness of not knowing what you’re spending your money on, the sad reality is that ignorance robs you of knowledge, and lack of knowledge is the thief of power. Simply put, ignorance makes short work of making sure you have absolutely no control over your financial future. The starting point of budget preparation is to accept that, as a financial tool, it is the supreme enabler of personal financial power. In many instances, preparing a budget forces couples to confront issues in their relationship that are causing stress, anxiety and marital tension. Although money itself has no power per se, it can be used within a relationship in such a way that it leads to mistrust, dishonesty, selfishness and in many instances, divorce. After the physical survival of the family unit, its emotional survival depends largely on financial stability and tranquility within the home, with the starting point being the family’s budget.
A budget is an under-rated, under-utilised, highly effective and incredibly powerful tool that can be used to more clearly map one’s financial future. A budget forms the basis for making informed decisions, taking firm control of one’s finances and securing a family unit’s well-being. Far from being a necessary evil that restricts and inhibits one’s lifestyle, a budget is an essential good that has the power to set one free financially. Let’s use it.
Have a super weekend!
Categories: Lifestyle Financial Planning