I get it.
The idea of doing a budget isn’t an exciting thought for most people.
A budget seems more like a consequence doled out by the fun police than a game played over the holidays at your parent’s house.
Contrary to what most people think, though, the work put into doing a budget actually makes so many other areas of our lives much, much easier.
And dare I say…more fun?
So today I want to share with you 5 unexpected ways that doing a budget will change your life.
If you’ve ever thought about doing a budget, but just haven’t had the motivation to follow through, I think these 5 life-changing benefits of doing a budget will help you get off the fence and start taking action.
Let’s dive in.
1. Emotional Freedom
You may think that by ignoring your finances, you’re avoiding the headaches and misery of looking through all those bills and debts and lengthy lists of spending transactions.
But quite the opposite is true.
When we push off our financial obligations in an effort to avoid the emotional pain of dealing with what we suspect will be a mountain of chaos, we’re actually bottling that emotional stress and carrying it around with us everywhere we go.
We may find ways to numb the pain or avoid thinking about the stress, but those solutions are often unhealthy and only provide short-term relief.
On the other hand, when we do the hard work of facing our money fears – by digging into our finances, writing down all our debts, looking through our banking transactions, and creating a plan for how to spend our money – a surprising thing happens…
…we feel a sense of relief.
Even though the mess isn’t magically cleaned up, the act of putting all the numbers down on paper (or in a spreadsheet, or an app) drains the money monster of almost all of its fear-inducing powers.
We no longer have to spend our days wondering how bad our financial position is.
Knowing exactly where we stand is empowering.
In most cases, it ends up not being as bad as we feared (we’re pretty good at assuming the worst in our heads), and even if the numbers are ugly, being able to look at the numbers and know exactly what’s going on reduces our money stress significantly.
Doing a budget actually creates the emotional freedom we could never gain by simply ignoring our financial reality.
2. More Free Time
Doing a budget and tracking our money takes time, so it may seem counterintuitive that doing a budget will give us more free time.
But that’s exactly what happens.
Without a budget, we can end up spending our money in pretty unhealthy ways and worrying about the ramifications of that spending later. (See #1 above.)
Those ramifications can lead to wasted hours pouring over the bills, deciding who gets paid and who doesn’t or laboring over how to divvy up our money in a way that avoids the most collateral damage coming back on us the next month.
We spend time on the phone dealing with service providers trying to negotiate payments or correcting late charges.
We spend time working with our bank to correct overdraft fees or missing funds from an unexpected withdrawal.
We spend more time than we care to admit trying to clean up our mess just to make it to the next month and do the dance all over again.
But when we do a budget, those time-wasters eventually start to disappear.
Bills start getting paid on time because we planned it that way.
We stop having negative interactions with our bank because we stop overspending which stops our bank from doing mean and horrible things to us.
Eventually, the bill collectors go away, the arguments with our spouse dissipate, and the time spent doing the monthly-bill-shuffle gets reduced to almost nothing.
By investing time into creating a budget, we actually gain more free time that we were losing due to our disorganization.
Doing a budget gives us back free time to focus on other more exciting things in life.
You may remember the early 2000’s when tech companies become acutely aware of their customer’s frustrations with how fast technology was changing.
Almost overnight there was a marketing blitz to put the phrase “future proof” on just about every new tech product on the market.
That phrase, future proof, was supposed to guarantee that the product would remain reliable and working far into the future, not demanding that the customer come back in 6 months to buy a newer, better, faster thingamajig.
Of course, that didn’t last long because companies quickly realized that there is no such thing as future-proofing.
Or is there?
When we do a budget, we build our goals for the future right into our spending plan.
We know that if in 10 months we’re going to have to buy something that costs $500, we had better be setting aside $50 every single month so that we can easily afford to make that purchase.
The budget is the magical process that allows us to think about the future and plan our spending – and saving – accordingly so that the future we have planned actually comes true.
There’s no such thing as an easy car-repair bill, but for those that have been saving money every month in preparation for when their car breaks down, that car-repair bill is definitely much easier.
Doing a budget ensures that we are making smart money choices each month (even if they are hard money choices) so that our future dreams don’t keep getting kicked down the road.
It turns out future-proofing, to a certain degree, does exist.
It’s called doing a budget.
4. Greater Clarity
It’s no secret that none of us get to have everything we want in life.
We may feel like Jeff Bezos or Elon Musk get to have everything they want, but that’s a lie.
We all have to make hard choices about what we get and what we don’t.
(Jeff and Elon might get to choose between shinier, fancier things than you and I, but money never absolves anyone from making hard choices.)
Without a budget, we often end up floating through life snatching up a boatload of things that we may have wanted at the moment, but then they just end up sitting in a closet or filling up space in our garage.
Whether we realize it or not, buying up all those gadgets and experiences and delicious restaurant meals in the past has cost us the opportunity to have money today to buy things that we might value far more.
Also Read: The Opportunity Wedge
As much as we might want to, we can’t go backward and un-buy all those things in the past. That money is gone forever.
But remember that future-proofing concept above?
When we sit down and create a budget, it allows us to think about what we really want, and realize we can’t just buy everything we think we want in this present moment.
We have to make hard choices in our budget to make sure we are saving money and setting ourselves up to be able to get the things we really want in the future.
In that way, the budgeting process is actually buying us a ton of clarity.
When we create clearly defined goals that we want to hit (save $1,000 for an emergency, save money to buy a new car, invest $750 a month for retirement) it creates clearly defined boundaries for our daily spending habits.
We have the clarity of connecting our money choices today with our happiness in the future.
We have the clarity of knowing that one day our future self is going to look back and be glad about the choices we made today.
Doing a budget provides clarity in our spending that we simply never had when only living in the moment.
5. The Ability to Say Yes
Many people associate a budget with a dreadful word in our society – the word “no”.
For many people a budget equals, “No, you can’t have that car, or that meal, or that dress, or that cocktail, or that house, or that life.”
And that sentiment isn’t entirely unfounded.
For someone who has been spending money freely and racking up debt on credit cards and essentially saying yes to every whim that comes along, doing a budget and having to scale back for a while is definitely going to sting.
But the thing is, if we’re honest with ourselves, all of our free-wheeling, untethered spending might have felt good in the moment, but that feeling didn’t last.
We have to keep spending and buying more stuff to keep the dopamine hits coming.
It’s unsustainable and nobody wants to be around when the wheels come off that financial bus.
Doing a budget, on the other hand, is a predictable and conscious method of saying no to ourselves for certain things now – but not forever.
In fact, just the opposite.
The goal of a budget is to empower us with the freedom to say yes to the things that matter the most to us.
Doing a budget shows us more clearly where we can say yes, and say it without fear that we’re messing up our financial plan or causing chaos for our future self.
Doing a budget is all about choosing what we say yes to.
The word no only comes up as an objection to things that would jeopardize our ability to say yes to something even more valuable.
If we think about a budget only being a factory that produces no’s, we’re missing the point.
Sometimes one yes is worth a thousand no’s.
Doing a budget empowers us to choose our yes’s wisely.
These are just 5 unexpected ways doing a budget will change your life, but there are certainly many more.
Our experience doing a budget was a complete game-changer for us.
If you’ve thought about doing a budget but never followed through with that brilliant thought, I highly encourage you to change that today.
My 3-part How To Do A Budget Series is the perfect place to start. In this series, I’ll walk you step-by-step through the budgeting process, teaching you the core skills you need to manage your money like a pro.
When you’re ready to take your new budgeting knowledge for a spin, check out my free guide 5 Budget Apps That Will Change Your Life to find the right budgeting tool for you.
If you decide you want a more home-grown solution to get started, go grab my free Live Your Wage Budget Spreadsheet. This is the exact spreadsheet my wife and I have been using for the past 10 years to manage every dollar we spend.
Don’t let fear keep you from taking control of your money.
Take the first step today.
Your future self will be so proud of you.