How many people have ever used a GPS, MapQuest, or a phone for directions? You probably used this technology to find the best route to get where you wanted to go.  Now, imagine that you are trying this same process with your money, looking for directions, and trying to understand where it goes.  We call this budgeting, or the technical definition:

“The process of creating a plan to spend our money that allows us to see how you are actually spending your money.”

According to, at its basic level, “Budgeting balances your expenses with your income.” What’s really powerful is that by seeing where you’re spending your money, it makes you aware of what’s going, shedding light on why you might feel financial stress.  However, budgeting is one of the easiest tools for managing your money. It can save lots of headaches from overspending, and can help us stay out of debt. Additionally, you might see expenses to cut back on, how much is being wasted on interest from debt, or make a potential savings plan for a future purchase.  With a budget, we have a very effective tool in keeping our spending plan on track.  This is the cornerstone to financial well being, and offers many other benefits:

  1. It allows us to see what our financial priorities are and how we choose to spend our money, and can help us decide what expenses are really important, what we can reduce, or adjust. Ask yourself: “Do I really need this?” 2. Helps us to organize our savings, plan for future expenses, and helps us to save for the unexpected-those things that can easily throw us into debt, or cause enormous unnecessary stress. 3. Because we can see the whole picture, it can help determine whether we will have enough money to meet our needs. 4. By studying our budget for 3 to 6 months, it can help forecast our finances in advance and identify any potential pitfalls. 5. Most importantly, it can show us money that we are wasting, which can be redirected elsewhere.  It’s not uncommon to find as much as $200, $300, or even $400.


Does a dollar bill really care about us, or should we be caring a lot more about where that dollar bill is going? We showed the power of lifetime earnings, and the large amounts of money that we can make over our lifetime.  With our relatively high incomes compared to the rest of the world, why do Americans have such a hard time saving?  There are lots of reasons, but maybe you fall into one of these categories:
1. The word “budget” sounds very confining, has negative connotations, or scares people about what they might find.  Maybe it’s a sense of guilt, or the fear of failure if you don’t succeed. 2. Researchers have suggested that many of us are addicted to spending, we “feel better” when we buy something.  Maybe by watching how your parents or friends have spent their money, it justifies you spending it. (The Blame Mom and Dad theory).  I work hard, so I have earned “the right to spend it.” Or, to keep up with the latest and greatest gadgets. Or, I’m out having fun, so why worry about the costs! 3. Budgeting is just too much work, like brushing our teeth late at night when we want to go to bed or having to mow the grass, when we just want to relax.  Laziness or procrastination rule the day, because it’s easy to pass the blame for not doing it. 4. Budgeting is for everyone else because “I know what I’m doing, or, look how successful I am! Or, why do I need a spending plan?”  I have heard people brag how successful they are, so they will just make more money to fix their financial problems when they have them. 5. My wife and I will just fight over this; it won’t go well.  We won’t agree on things, or what’s important to her, isn’t as important to me. 6. Finally, one of the biggest reasons people don’t do budgets: “I Don’t Know How!”
Excuses are easy and most of us have used them.  However, with the points mentioned above, what are the consequences of not budgeting or taking action?  How much fun is stressing over money, or worrying about debt?  One of the biggest causes of divorce is failing to discuss money issues with a spouse, or making purchases selfishly.   Before spending money, we must ask ourselves, “Does it really feel good to have made that purchase?”  Is budgeting really confining, or limiting–or can it actually be liberating?  If we knew where we were wasting money, could we plan our expenses better?  Is it really that hard to budget?  Finally, does procrastination and laziness actually solve anything? Ask yourself: if my spending and debt were under control, would I feel better?