The reason why people shun the idea of having a budget

I’ve had a bit of a revelation! Let me explain…

I was reading an email from a budgeting software company that was explaining in a long and drawn out fashion, how to work out a budget. There was nothing exciting in that.

And the whole purpose of the exercise was to show how hard it was to work out a family budget with a pencil and paper. And, looking at his explanation, it was hard.

Of course, if you purchased his budgeting software, you could avoid the tedium of such a long winded process.

I’ve often wondered why it is that so many people I meet have bought such programs which then sit virtually untouched in the packaging they came in. Some of them have been opened, some of them have been attempted but I am yet to see one of these programs up and running successfully. That is, apart from the videos that the creator of the program shows you online.

Now, I’m not saying that these programs are crappy. Anything that can help you to learn how to budget has to be good. But – it has to be realistic and simple. And it has to make somebody want to adopt it like a second skin, because it’s easy.

This made me realise that the major reason people who use my system have such fabulous results is because they can understand how it works – without having to consult a computer program or a spreadsheet. They just ‘get it’.

Apart from the fact that I personally speak to them, and teach them how to set up their own budget, the main difference is that they know exactly the moment when they have overspent on their budget. There’s no waiting for a bank statement to tell them; there’s no consulting the ‘spreadsheet’ to see if they’ve blown it.

But none of that was the revelation.

What suddenly hit me was that – most ‘budgeting systems’ are based on, and want you to make, calculations and projections for the coming year. They need you to know in advance how you’re going to live your life. And that’s unrealistic.

Why? Well that’s because we all get paid weekly, fortnightly or monthly. None of us get paid on an annual basis. And none of us can accurately predict either our annual income or our annual expenditure.

Sure, we might have a fair idea of these figures – but life isn’t like that. It’s just not that predictable. Let me explain –

Unless you have a ‘fixed rate’ on your mortgage, you can’t apportion the annual interest costs of your mortgage, because interest rates are not stable.

How can you forsee the costs of your utilitieswhen your usage may change because of a change in circumstances? A simpler example of this – you might decide to purchase a big plasma TV, (which are known to use more power) or you might get rid of your vintage fridge for a newer model that uses less power.

What you spent last year on haircuts, clothes or car costs can change dramatically if you decide to change your style, your size or the way you use your car.

A household budget simply cannot run on the ‘annual’ figures that you forecast on any one particular day.

The other part of the revelation is this – these ‘other’ types of budgeting systems are locking you in to living your life the same way, every day, for at least the next year. That’s the way they’re designed!

And that’s so boring!

How lifeless would it be to have to live your life according to the figures that are set down on paper? There’s no room for spontaneity, no money for impromptu excitement, and nothing to look forward to.

That’s why so many people shun the idea of having a budget.

I wouldn’t like having to live that way, and I wouldn’t expect you to, either. But if I could show you a different way – would you be prepared to try it for a month?

 

© Carmel McCartin – Budget Bitch

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