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The Word Budget is Scary

Budget. Are you already having thoughts about giving things up or restricting yourself? If so, you’re not alone. The word budget has budge in it, so it’s no surprise that our emotional brain immediately thinks we’re constricting ourselves when we’re on a budget because we can’t budge. 

Budget and Diet

The word budget is much like the word diet. “Your emotional brain responds to the word budget the same way it responds to the word diet. The connotation is deprivation, suffering, agony, depression.” says Brad Klontz, a psychologist and certified financial planner. With such a negative association, it’s hard to stick to both. Most people have tried a diet at some point in their life so think about how that felt for you. You probably felt like you wanted food more when on the diet than you did before. That’s exactly what happens. When we deprive or restrict ourselves of something and feel like we can’t budge, our brain tells us that it is more attractive than it was originally and that the reward is higher. Therefore, we want it more and then as always, the diet comes to end because we can’t seem to deprive ourselves for any period of time.

Most budgets don’t take everything into account. For example, if you Google budgets, you will find many worksheets and Excel templates that show you how to budget your fixed expenses. This seems very restriction because we all have items that we spend money on daily or multiple times throughout the month and a budget doesn’t usually account for these fluid costs. So, we feel like we can’t spend anything. It doesn’t take long before we stop using it because of that scary feeling it gives. As a result, we choose not to use budgets at Money Mentor Group.

Other reasons it’s not good to use a budget.

Budgets often do not take time into consideration. They just look at the income coming in and what goes out rather than taking when you are paid into consideration. If you are paid monthly, your budget would look a lot different than if paid biweekly or bimonthly. Another downfall of a budget is that if your bills are $3,000 a month and your income is $3,500 a month, you see that you have $500 leftover but by month-end, you have no idea where that money went. 

Get financial security with a savings and spending plan.

With a saving and spending plan, you get the clarity that you have been seeking. It shows not only the fixed expenses that you have but also the daily spending expenses, like gas and groceries, as well as the occasional expenses that you have to plan for like wedding gifts and car repairs. It also takes the time you are paid into consideration. Therefore, it gives you a real-time picture of what your finances look like now and in the future. It allows you to track everything throughout any time in your life. With a savings and spending plan, you get an allowance for special occasions and things like your hair cuts or pedicures. As a result, you don’t feel so restricted and it’s something you can stick to over a long period of time.