I’ve caught this disease before. And you will too if you haven’t already. It’s called “budgetitis”—the act of obsessing over your budget so much that it makes life miserable. Below are a few symptoms of budgetitis and a few suggestions on how to overcome it.
Letting Software Rule Your Financial Decision Making
I use personal financial accounting software with great success. But it can get out of hand if I let it. Software is just that—a tool to help you manage your budgeting. It isn’t a guru that has to be consulted every time you pull out your wallet. Software only tells you what is. It can’t make a final decision but it can aid in the final decision.
Creating Too Many Budget Categories
I’m experimenting with my own budget over the next few months. I’ve whittled 15 budget categories down to 7. Taking my own advice from the point above, I’m focusing on the categories which have the largest financial impact—food, entertainment, and miscellaneous household spending. If I manage these categories correctly, I will have nailed down 80% of my budget.
I recommend first time budgeteers do the same. Instead of starting out with every budget category imaginable, start with a handful you know will have the largest impact. If you don’t know which ones to setup first, start with entertainment and personal spending (eating out, bookstores, non-essential clothing, coffee stops, etc.).
Obsessing About Overspending
It’s liberating to know I don’t have to fret about overspending in too many categories than I can’t handle. Before my budget category reduction, anytime my wife or myself went to the store, my mental calculator would kick in.
It was hard trying to keep everything straight in my head. And, when we did overspend, I would fire up the budget spreadsheet and play the shell game, moving money between categories trying to cover where I overspent.
It really was self-inflicted lunacy. Nobody was forcing me to use this level of detail in my budget. Why was I forcing a square peg in a round hole?
Not Budgeting Fun Money
Some people call it “blow” money. It’s a set amount each month you can spend on anything without feeling guilty.
This category is important because it gives you a reprieve from your day-to-day budgeting rituals. It also gives you a sense that you control your money and not the other way around.
Budgeting, by necessity, is a belt tightening process. It can be very difficult, especially if you’ve never done it before. By allowing yourself the flexibility to spend a small amount on anything each month, you’re more likely to enjoy your budgeting. Which brings me to my next point.
Not Having Fun
Like I said before, budgeting is hard…at first. But it shouldn’t stay that way. If you struggle with your budget every month, it’s time to reassess where you’re going.
Budgeting allows you to funnel your spending and saving into goals that will truly make you happy. A lot of us don’t realize it but much of our spending goes towards “things”. Objects that really don’t bring us more happiness, at least not in the long run.
What do you really, really want? I’m not talking about the latest video game console. I’m talking about the year long, around the world trip you keep talking about. The dream you have about quitting your job so you can work from home and watch your kids grow up. What are your dreams beyond the next trip to the mall?
These are the goals that make budgeting fun. Goals that make it worth it in the long run.
Your turn now. Do you find budgeting a chore? Do you have a major goal that might give you more motivation?