Budgets and diets are a waste of time! Most, if not all personal finance (PF) bloggers are probably surprised I would say that. A budget or diet is not the answer for overspending or overeating. If these things worked for everyone, there would be no debt or overweight people. A budget or diet is intended to help us reach a financial or personal goal. Do budgets or diets even work?
I spent my entire career preparing budgets, five (5) year plans, strategic plans and business plans. After thirty (30) plus years of planning, it is probably odd that I am saying budgets are a waste of time. Am I suggesting to just live without a budget? Not exactly, keep reading! Most people know nothing about budgets and just blindly put one together and expect some magical solution to their overspending. That won’t happen!
Most PF bloggers suggest to use a budget to manage your money. A budget is a structure to help you achieve your financial goals. A budget is the result of planning your financial goals. How much time do you spend planning your financial goals? This is the most important part of planning. It is the motivation to help you through the tough times when things do not go exactly the way you would like. It is the difference between success and failure!
The more thought you put into the planning process, the more likely you will be successful. Where do you start? I often see worksheets online as a template for budgets. You could certainly just fill it out and see if you have a surplus or loss after you pay your bills. If you are happy with the results, you have a budget or do you? Have you thought about any of expenses? Are you making the best use of your money? For example, you could spend too much in rent or for your mortgage.
Are you able to check off all the boxes? Are you saving for retirement and emergencies? Too often, we get caught up in the day to day kinds of things versus what we should think about for the long run. This is just some of the issues you need to think about in that planning process. See, it is not enough to just fill in the blanks with your rent or mortgage payment. You need to answer some questions about your rent or mortgage payment. Can you reduce the amount you pay for housing?
Can you refinance your mortgage and reduce your payment? Let’s say you can shave off a hundred dollars, what do you do with the savings? Do you add to retirement savings, repay debt or what? There are a lot of decisions which require some thought. How do you know if your new payment is appropriate for you? Should you move, downsize or take in a boarder. There are even more questions that you should ask yourself before you ever take on a mortgage or rent an apartment.
When my daughter graduated college, she was on top of the world. Her first job would not support her lifestyle. She was lucky; she had me to counsel what to do. She moved home after graduation to save for the move in costs of an apartment. As luck would have it, she took over her grandmother’s apartment when she moved into assisted living. Her “rent” was the equivalent of one week’s wages! When her brother graduated college three (3) years later, he shared in the cost of the apartment. Keeping their expenses low made it very easy to save money for retirement and savings in general.
The budgeting process starts with lots of questions, many of them about what you spend your money on versus just recording them. Whether you earn minimum wage or millions of dollars a year, the only difference is the magnitude of the expense. Budgets and diets have one significant thing in common. You cannot live without money or food! Taking the time to analyze your spending will yield much more than you realize. Analyzing your eating will do the same.
Many diet books or programs ask you to record the foods you eat every day. It is supposed to make you aware of your eating habits. Taking the time to think about what you eat is as important as how you spend your money. I used my planning approach with weight loss when I lost thirty-five (35) to forty (40) pounds thirty-four (34) years ago. I thought about what I ate that caused me to gain weight.
I went through the holiday season of 1977-78 and gained about fifteen (15) pounds. My cause was eating candy bars at 3 PM and overeating at dinner because of stress. You see, I love desserts or sweets! Both of which was plentiful during the holiday season. Add in some stress at work and I was out of control. I tried diets before and they worked for a short time and I went back to my old habits. My solution was more pragmatic. I replaced my bad choices with better choices.
Not that different from budgeting! I brought more fruits and vegetables to work to replace the bad foods. In roughly ten (10) to twelve (12) weeks, I not only lost fifteen (15) pounds, but it went so well that I lost close to twenty-five (25) additional pounds. I surprised myself with success and it motivated me to raise my goal. This success encouraged me to start an exercise program and I have kept the weight off for all these years.
My approach to budgets or diets is different than most! Just blindly following a budget or diet does not work! It doesn’t work because it is artificial or some cases it can be extreme. There is never one solution for anything and trying to use one size fits all solution will not work! The only way to make it your own is putting in the time planning and thinking about your choices before you make them.
I would never suggest my “diet” or “budget”, however I would advocate my approach of planning and developing your own solution. Not only will you make it your own, it will become your motivation to help you through those rough times. Budgeting is not just tracking your expenses and a diet is not right for everyone. Planning is taking a deeper look at your expenses and eating habits before you start tracking either. Traditional budgets and diets are a waste of time!
Photo by: sunshinecity
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