Having a budget can also mean that we know how much we spend. This may seem obvious, but knowing that we spend more than we earn can enable us to see how little self discipline we have. This can send shockwaves through our minds, as we begin to realise that we have less control over our lives than we thought. We all have a certain attitude towards money. Sometimes it is a positive attitude, other times it is negative and bitter. Budgeting can bring out all aspects of how we feel about earning and spending money.
We cannot hide the truth here; budgets do have a negative side, and this side is innate. This is because the word ‘budget’ immediately implies a restriction is about to be imposed. Whether this restriction is to fall within the confines of a corporate environment, or behind the four walls of someone’s home, something will have to be ‘cut back’ and people will have to manage on less somehow.
To combat this, when we talk to our clients in our role of financial planners, we tend to call a budget something else. We refer to the budgeting exercise as making a ‘spending plan’. Planning as an exercise implies control, and the client will generally gravitate towards having some control over this most vital aspect of their life and future happiness.
Having a spending plan means that we are also, in a sense, giving ourselves ‘permission’ to spend money, after we have worked out how and when we are going to spend. Spending plans enable us to set priorities for our spending, as well as in our lives. We won’t go out on a social night out, for example, if we know it will have negative impact upon our quality of life.
Having a spending plan allows us a sense of relief too. Knowing where we stand in regard to the money we have makes us feel better. Even if we do not have a lot, we still have total control of where we are. It won’t run away from us, in other words.
To sum up, budgeting has a profound emotional as well as financial impact on our lives. Even so, it is at the very core of what we do when we manage out finances, and is to be encouraged. Taking control of your life when it comes to money is one of the most important and positive things you can do.
