Why A Budget Won't Fix Your Terrible Money Habits

Why A Budget Won't Fix Your Terrible Money Habits


Why A Budget Won't Fix Your Terrible Money Habits - I am so sick of people telling you to keep a budget. I know half the people who are out there telling you this advice. They don't even keep a budget themselves. Let's get real. When you keep a budget, which you don't, what do you do?


For the four weeks that it actually lasts you wake up every day. You're like, "Ugh, God I got to write this thing down about what I spent. I probably shouldn't write that down because I know I'm not going to do that again.

That was bad." And then at the end of the month, you look back You feel horrible. You feel guilty. You realize you overspent. And then what do you do? You say, "Screw this.

Read also: Why Buying A Home Is Usually A Terrible Investment

I'm not going to do this anymore." That's how budgets work. They make us feel bad about ourselves. They don't provide any forward-looking information. They're just pointless. I prefer something totally different. I call it a conscious spending plan. And the benefit of this is you get to spend extravagantly on the things you love and you get to cut costs mercilessly on the things you don't.

Instead of tracking all your spending meticulously and then looking and saying, "OK. I guess I did that." This time you look forward.
I want you to pick something you really want to spend on. Maybe it is a vacation that you want to take.

Let's just assume that it costs $1,200. OK and you know that you want to do it a year from now. Easy math. You just say, "I'm going to put $100 a month away in order to pay for that. And the beautiful part of this is that you can actually make it automatic.

You're not sitting there saving 100 pennies. You're not doing that. You're actually just doing it automatically. You make the decision once and it just automatically flows every single month. A year from now you wake up, boom. Time to take that vacation. It's all paid for already. By the way, if you want to get a little more aggressive, maybe save $200 or $300 per month if you've got it.

And the real beauty of this is it's not just about saving for a one-time trip. By flipping your spending from looking backwards to looking forwards, you can do the same thing with your savings. With your investments. With all parts of your life, even your guilt-free spending. So I want everyone to stop thinking about budgets and stop feeling bad that you can't keep a budget.

Almost nobody maintains their budget. Instead, I want you to flip it, look forward and say, "Where do I want my money to go?" Out of the next $100 I earn, I want to save $10, I want to invest $10, I want to have guilt-free spending of $20 or $30 etc,etc.

That is how a conscious spending plan works. And it's way more effective than a budget.