Don't Use a Budget to Manage Your Money

Many people cringe at the thought of a budget as it raises mental images of not being able to go anywhere, do anything, buy anything or have any fun.
 
Yet everybody has a budget, just as everybody has a diet.  Maybe your diet consists of eating twinkies and drinking coke. Even though that type of diet does nothing for your health, it is indeed your diet. Maybe your budget is spending whatever money you have, which does nothing for your financial health.
 
Playing a mind game can help you form healthy financial habits. Don’t think of it as a budget – think of it as a spending plan. (Truth in advertising a spending plan and a budget are the same thing, but the term spending plan sounds so much better!) A properly designed and maintained spending plan gives you freedom rather than restrictions. 
 
Instead of your money simply disappearing, a spending plan allows you to actually decide where to spend your money. It helps you plan for the necessities and the niceties for both your long and short term spending. It gives you the freedom to decide what is most important to you and then use your money wisely to achieve those goals, instead the money merely trickling through your fingers.
 
A spending plan allows you to decide on appropriate boundaries about where, when and how to spend your money. You have complete freedom within those boundaries. Rather than being restrictive, a spending plan helps you focus spending on what really matters to you. 
 
We live in Florida and our patio is screened in.  When our youngest was two years old, he was allowed to play anywhere within the confines of the screened patio.  He had complete freedom within the defined boundaries. He could not go past the screen enclosure, but he was able to play wherever he wanted within that area. The screening protected him from wandering off and getting lost, or meeting an alligator, or falling into a lake or swimming pool.
 
A spending plan works in a similar way – it allows you to set up a wall around your finances.  You have boundaries around which to plan your spending.  You have freedom within those boundaries to spend money as you wish.  But having the boundary keeps you safe from bad stuff - like financial alligators!
 
We have run into several people during our time in ministry who earned significant salaries but they never had any money for what was really important to them.  One person had a six figure income, but had trouble making ends meet each month.  He estimated that he spent about $50 a month eating lunch at restaurants. Using a spending plan and tracking where his money was actually going allowed him to see that he was really spending $250 monthly eating lunch at restaurants.
 
This was a real eye-opener as he had several young children whom he hoped to send to college. Once he started to use a spending plan he redirected all that lunch money to college funds for his children. The plan allowed him to focus his spending on his highest priority.
 
Once you establish and use a spending plan, you will see how freeing it can be.  As the Bible tells us in Isaiah 55:2.  “Why spend your money for what is not bread; your wages for what does not satisfy?”
 
Coming soon ... creating your spending plan.

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