Lisa Whitley—Seriously, why? Everyone tells you that you should have a budget. But if it is such a great thing to have, then wouldn’t everyone do it happily without being prodded by people like me?I believe that the thing that often stands between knowing that you should have a budget, and actually practicing budgeting, is not truly understanding the purpose of the exercise. A budget without a purpose — a goal — is a frustrating dead-end.First, merely tracking your spending is not the same as having a budget. “Budget” means that you have identified, for any given spending category (housing, transportation, groceries, etc.), an amount of money that you want to spend. You track your spending against the target figure for that category. Apps that collect your transactions for your review can be helpful, but realize that they only show you what has happened in the past. When you are in the “spending moment”, they cannot keep you from drawing outside of the lines.Which brings me to the purpose of staying within the lines. No one likes limits. No one wants to be told what they cannot do.Here’s my idea...just as assiduously as you track your spending, track your goals. It may be a savings goal (building an emergency fund or an anticipated big purchase) or paying down a debt. Either way the goal needs to have a specific dollar figure attached to it. The conversation that you should be having (with yourself or with your partner) isn’t “How much did we spend at the grocery store?” but rather, “How much did our savings balance for next year’s vacation grow?” “How much did our credit card balance fall this month?” The margin — the difference between your paycheck and your actual spending (based on your budget targets) — funds your goals.
Some find budgeting to be fun. But the rest of us? We need a bit more motivation and that is where monitoring your progress to achieving a goal comes in. That’s your “why.”
