Years ago (before any of the fabulous technology that we have now), those of us that did a budget had it all written down in a text book somewhere, or on a scruffy, tatty piece of paper. It was just a list of what we wanted/needed to spend our money on. Generally, the costs were itemised and then the “grand total” was at the bottom; As long as we didn’t go over the total, then “Happy Days”…. Sound familiar?
My, how things have changed..…. we moved on to Excel Spreadsheets (for those of us ever clever enough to know how to use and program Excel) and some of us these days, even use a fancy App on our Phone to tell us where we are spending our money. All good systems but what they DO NOT tell you is, how much money you SHOULD have in your bank account moving forward, for you to be able to afford that lifestyle (that you love so much) not to mention all your financial commitments into the future.
Budgeting as a task (some would say mundane/boring/not necessary) is particularly difficult as we are living in the age where we are encouraged to get into debt (or for some of us, “even more debt” than we are already in)… Credit Cards, AfterPay, Buy Now/Pay Later, Interest Free credit… the list goes on. All those sparkly things we always dreamed of buying, but could never afford, are now even easier to get our hands on and so we can make them ours sooner rather than later. Instant gratification in abundance! Hurrah! What the Banks, Stores, Finance providers fail to remind us is that these things have to be paid for at some point!
I was brought up in a world where you saved for what you wanted, and then when you had enough money; you bought it.. OR you DIDN’T have it…. End of story! These days we can take it home that day without actually spending a cent….. and then it starts (or continues!)..… You love the feeling of getting what you want, and forget to plan or schedule in the repayments for the future… the repayments that no-one has warned you about yet, because all they wanted from you was the sale! Remember the “layby” days? The shop didn’t let you have your lovely new item until you had paid for it, in full….!!! That was the sensible approach… Research now shows we are more likely to pay MORE for something we want, when we can “pay for it later”. We go out for a $100 pair of jeans, and come back with a $200 pair of jeans – and we didn’t spend a cent! Budgeting has gone out of the window! This is why Budgeting doesn’t work.
Thinking back to your fabulous budget, the one in your your text book or on a scrap of paper, this scenario really doesn’t fit in today’s times because none of those systems cater for future repayments for the stuff you “just had to have”…. You know I am right. Budgeting is a nasty word anyway. Research shows that it conjures up negative emotions and feelings of deprivation…. Pretty much like a diet. As soon as we go on a diet, we start craving all the things that we are not supposed to have…. Whereas when we eat in moderation and are allowed the fatty yummy stuff, on occasion… it doesn’t seem so bad after all! We can handle it.
Plus! As I write this, the Financial professionals of this great World we live in are warning us of banks tightening up, changes are happening, credit card payments are being looked at. I believe that the Banks are even looking at how much their customers are using Uber Eats! No-one can have any fun anymore, huh? Even for a loan now you need to detail your regular/day to day living expenses and financial commitments….. That tatty piece of paper is really not a good look when you are applying for that loan…..
Now, more than ever, we need a Spending Plan. A Spending Plan is like a Budget, but it tells you exactly where you are currently Spending your money… It also tells you exactly how much you need to have in your bank account for you to be able to afford all those expenses and commitments into the future. You tell it ALL of your expenses…. Right from whether you have one or two “shop bought” skinny cap or lattes each day, right through to all your regular bills and commitments, fun money and larger items – last time your tyres were changed on your car, etc, etc….. Once you have a Spending Plan set up, all you have to do, is live it. We all know things change, and there is always stuff cropping up out of the blue; well a Spending Plan takes care of all that too…. What’s not to love? Surely you’re “chomping at the bit” to find out?
Acknowledging that Budgeting doesn’t work and that having a Spending Plan is the way forward, I can pretty much guarantee that you will destroy that text book and let go of that tatty bit of paper (yes, the one with all the crossings out, as times and amounts have changed)…. You won’t even need that trusted excel spreadsheet – and let’s face it, can anyone really program it properly anyway?
A Spending Plan proves why Budgeting Doesn’t work and demonstrates where you are now, and shows you exactly where you need to be going forward. You can see your financial future before you get there! Think about it…..
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