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6 Ways a Monthly Budget Brings Freedom, Not Bondage

Here is a little test for yourself. When I mention the word budget do you think of the word “freedom” or do you think of the words “constraint” or “bondage.” The word you choose probably identifies your basic attitude about having a monthly budget.

budgetI love budgeting! I know some people think that’s crazy. For them, budgets bring to mind images of people in straitjackets, unable to move. The household budget acts as a restrictive torture device, in most cases forced on them by someone who thinks they know how to manage money better. Budgets can make people feel confined and boxed in.

I’ve been there.

I love to spend money as much as the next person. At one point in my life, I felt like a budget wouldn’t help me accomplish any financial goal. I knew for sure it wouldn’t make me feel good because I couldn’t buy the things I wanted. Budgets seemed difficult to piece together and I frankly didn’t have the time (or want to take the time) to figure it out.

Fortunately, I came around by doing some soul searching and through the gentle prodding of someone close to me – my wife. Eventually, I agreed to give budgeting a three-month trial run.

That decision changed my life. Not only that, it changed our lives. And the best part was, we received something I never thought a budget could possibly produce: Freedom.

In just a few short months I realized budgets produce freedom, not bondage. Here are six ways they can bring the same freedom to you.

Budget Your Money How You Want

I completely understand the straightjacket mentality of a budget. A typical budget will have categories where you plan to spend money. You allocate an amount of money into that category and then your goal is to hold the line and not spend anymore than you said you would. That feels constraining and is a reason many don’t want to budget.

But here is the thing I realized…you can create whatever expense categories you want. And you can put in whatever amount you want. It’s totally your choice.

If you want to spend $500 a month on nail salons and hair coloring you can. If you’d rather put that money towards electronics or movies or a gym membership you can. It’s up to you where you spend your money. No one is forcing you to spend it in any special way.

Now you do have to provide for your monthly needs. Food, clothing, shelter, utilities and transportation will be a must. But beyond that, a budget allows you freedom to spend your hard earned dollars anyway you see fit. In that way, it’s very freeing.

Related Content: Always Plan a Budget Around These Five Expenses First

Adjust and Reallocate

It’s going to take awhile for you to understand the ebbs and flows of your money through any given month. There will be surprise expenses. Some months you will spend more in one category than in other months.

In short, each month is it’s own new animal to tame. And what you place in the budget category at the beginning of the month may need adjustment midstream.

I’ve got good news for you…that’s OK. You are not a genius who can foresee all possible outcomes in the future. Don’t feel pressure or obligation to stick to THE number you placed in the category at the beginning of the month. You can adjust as needed.

It took me a couple of months to realize this. I was so determined to “get it right” in one shot. But I quickly learned that things come up. Repeatedly I had to go back in the middle of the month and adjust the budget.

Now here’s the trick to that. If you take out or add money to any budget category, you have to put in or take out from another category. Your budget has to balance. You can’t just add money to a category that you don’t have.

But again, it’s really freeing to know you can make changes on the fly. The budget is a living, breathing, fully-adjustable document.

Related Content: How to Make a Zero-Based Budget in Three Easy Steps

Much Needed Focus

In 9th grade, my dad and I built a wooden telescope for my school science fair. The telescope worked perfectly but we didn’t build it to magnify or focus images clearly. The purpose was simply to demonstrate the principles of reflected light. We could see the moon through the eyepiece but not any fine details.

Focus in any area of our life fine-tunes us. It brings to the forefront issues we haven’t been seeing clearly. Sometimes it even identifies issues we know are there but have been avoiding.

Deciding to focus on our financial life by creating a budget revealed big, gaping holes in this area of our life. These issues were causing us to lose financially. We were in bondage to bad money habits.

Focusing on doing a budget helped free us from these habits. It didn’t totally remove the natural tendencies we had to spend more than we should. However, those impulses were reined in – fairly quickly I might add.

Focus Breeds New Levels of Discipline

In the old days, if we saw a new gadget, I’d buy it. If a new “whatever” hit the shelf, we had to have it.  If we were tired after a long day at work, there was a simply solution – eat out.  This was our mindset, day in and day out – completely undisciplined in how we spent our money. Money was controlling us.

The focus I mentioned above that we began to develop, produced discipline in our spending habits, something we had been sorely lacking. We were more careful with splurge spending, now that we had budget categories with dollar amounts attached to them.

And we began to ask ourselves questions. Questions like, “Do we really need this?” and “Can we wait to purchase this until later?” and “Why are we really buying this?”

That was the first sign things were changing. And the more we budgeted, the more discipline we developed. We were free from an undisciplined lifestyle and free from money controlling us.

Free from Crisis Panicking

As our discipline increased, it became apparent we were no longer managing from crisis to crisis. As part of our budget, we allocated a certain amount each month to be deposited in an emergency savings fund. This continued to build each month until we had several months of expenses saved.

Then when the washer and dryer broke (which they both did), we didn’t have to scramble to get them replaced. If the kids needed a doctor, we didn’t check the budget to see if we could afford it. When the car unexpectedly wouldn’t start, we had the money for the tow and the repairs.  All the money to cover these “surprises” came from our emergency fund.

I can’t describe the pressure this released out of our lives. It freed our minds to relax about life’s emergencies. No more crisis managing. And it was all because of our budget.

Related Content: Emergency Fund Basics: The Step on Which All Other Success Is Built

Building Relationships One Budget at a Time

I said budgeting changed our lives. But it wasn’t all about money.

When two people are married, you just don’t sit down at a computer one day and say, “Let’s make a budget.” The reason being is that both people are different. One might like to spend while the other likes to save. The visions of how to handle money are different. The polar opposites are headed for conflict, unless they talk it through first.

The budget numbers are a secondary issue. They cannot be queued in until all personal issues are resolved. Budgeting requires communication beforehand about values, goals, dreams, and fears. You have to be willing to see the needs of the other person and understand why they are like that.

For many couples, this will be the toughest part of the whole budget process – actually talking with their spouse. In the long run, however, it will be the most rewarding for the oneness it will develop in your relationship. For us, it brought us closer together in ways I didn’t imagine.

For singles, it doesn’t get easier. You don’t have a partner to bounce ideas off of. So I would encourage you to find someone you trust to act as a budget confidant. You need assistance to make this work how it should.

Budgeting is very freeing when you do it properly. It will lead you into a disciplined and focused lifestyle. Additionally, it will relieve the pressure of managing crisis to crisis. And it will cause you to learn about yourself and take your relationships to a deeper level. And through it all, choices became simpler to make because you have a plan.

What could be more freeing than that? If I had known budgeting would do all that, I would have created one sooner.

If you like to learn how to make a budget and some of the pitfalls involved, you can check out this post I wrote, “The Ultimate Guide on How to Make the Best Monthly Budget Ever.” 

Questions for Discussion: What’s holding you back from doing a budget? How has budgeting changed your life? Do you feel more freedom from budgeting or does it still feel like the budget controls you?

Image by aslysun at Shutterstock

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Comments

  1. Thinking about and planning where your money is going is a great way to start living a less stressed out life. My budget is definitely not perfect but it definitely is a great guide as to where the majority of my money should be going. Now budgeting everything together with my bf instead of just splitting it down the middle…that’s going to be a tough one!

    • Haha…we’ve all been through those money issues in our relationships Amanda. Getting on the same page with the bf will be the single biggest thing that will move your relationship forward. It’s not going to be easy because you are both different people with different visions on how to spend money. I thought I was on the same page as my wife when we got married. Turned out I was wrong. We are vastly different but we worked through it. We now work as one team on our finances and it’s awesome!

  2. Great post! We don’t follow our budget exactly, but it is a good guideline to see where our money is going and where we are spending too much.

    • Thanks Michelle! Budgets should be flexible and designed for some give and take. They don’t have to be rigid or restrictive. I guess it’s all in the mindset of the person. I choose to view them as freeing.

  3. Nice post Brian! I could not agree more that a budget really can be freeing. I started budgeting when I was in debt and we’ve been doing it for about the past 9-10 years of our marriage. We don’t really restrict ourselves, but view it as a roadmap for our money so we can put it to the best use for us. That gives us the freedom to make choices and not feel like we “have” to spend all the money we have allocated in each category.

    • “A roadmap”…that’s a great way to view it John! We usually don’t spend all the money we allocate to a category. Now that you mention that, I wonder if that’s why people may view budgets as restrictive…that if they say they are going to spend $300/month on clothing for the family then they have to spend that $300 ONLY on clothing. Well what if you only need $150 of clothing one month? Do you spend the other $150 on needless clothing? No…you just move it to another expense category, or savings, or investing, etc. That’s where the freedom comes…to make those types of choices…and when budgeting gets cool!

  4. While I can’t say that I have stuck to a budget month-over-month, I have been tracking our spending for over a year now and it definitely has been beneficial to review from time-to-time and make adjustments in our spending/saving as needed.

    • I love to review our budget. It has even helped me to see what we did in the prior year in any given month. Sometimes I forget a regularly occurring expense in a certain month (like I have to budget in July for back to school clothes). It helps to leave notes in the budget that can trigger my memory the next year at the same time.

  5. Planning is very much important when it comes to budgeting and both should agree to that plan so that it gets realized in longer term. This would definitely help us be it in emergency situations where we need not press the panic button for our unforeseen expenses

  6. Brian! Great to see you over here. I like your setup. We were using eleven40 on http://www.allthingsfinance.net for a while as well. Thanks for hitting me up over at Modest Money.

  7. Yes! People tend to relate the word “budget” to the idea of suppression. But if it weren’t for my budget, I wouldn’t be free to do what I really wanted! Instead, I would just spend on frivolous things that really don’t matter in the long run.

    • I’m embarrassed at all the frivolous things I have spent money on in the past. Now I’m more focused on need and the value that a purchase brings into my life.

  8. FI Pilgrim says:

    I’m a huge fan of budgets myself and I agree with Grayson– keeping a budget for a little while will definitely teach you discipline and self-control, even when you don’t track it closely anymore.

  9. I had to budget when I was in debt, but now that I am out, my budget is less restrictive. I actually am able to do most of it in my head because I know the numbers so well. I am not a fan of budgets, but I do understand the power of them.

    • As long as you are aware of the numbers and are seeing positive movement with your financial situation, I think that is fine. I know some of your story Grayson and you definitely aren’t being crazy with your money now that your debt is gone. Even though I’m a spender, I have a bit of a nerdy streak in me and like to see the numbers put down on paper (excuse me…I mean an Excel spreadsheet). Seems to keep me more grounded.

  10. TacklingOurDebt says:

    Congrats to you both for getting a budget going and working on it together. It sounds like it is really going well for you guys.

    We’ve been following a budget for about 20 months now and it has made things easier for us. We still have times though where we spend too much. I am not frugal by nature so it has taken me a lot of work to change my ways.

    • The funny thing is, after doing a budget for that long, it becomes like clockwork. In the beginning, I spent well over an hour putting a monthly budget together. Now that I have such a long track record built up and have seen how things mostly stay consistent from month to month, it only takes me about 15 minutes to put one together.

  11. Alexa Mason says:

    I completely agree that a budget is freeing. I am living on a lot less now then when I was married so it has been crucial for me to live on a budget. I feel so good about myself when I stick with it.

    • I like the confidence and positive feelings sticking to a budget brings me as well Alexa. To keep me motivated, I’ve made budgeting almost like a game, where it’s me vs. the budget. I win if I can stay within the allocated numbers by the end of the month. I don’t always succeed, but I win more often than not. That makes me feel good.

  12. Alas I cannot proclaim love for my budget with the same fervor you do. I have a love-hate relationship with it since am still learning the ropes of sticking to it and by golly does it take some discipline getting used to it especially after having a pretty much budget free life (which didn’t turn out particularly well). This post in a way creates a probable ideal I should be working towards with my budgeting efforts. Hopefully I can avert looming crises and reach budget nirvana 🙂
    Great post

    • Budget nirvana…I love that Simon! This post would have been WAY too long if I had detailed all the frustrations and challenges we met along the way. I’m a spender, so the idea of having a budget wrapped around my neck was not something I was looking forward to. I just proceeded with little baby steps. Small events along the way began to shape my discipline – like the time I walked away from a pair of shoes at a department store even though the purchase of them would only have put me $15 over budget. Believe it or not, that was a big deal for me. I could have easily said, “Eh, it’s only a few dollars over. No big deal.” But I chose to stick with the process. Eventually these type of decisions (and the other benefits I was seeing of budgeting) changed my outlook on the whole process.

  13. Great post! I think like you it gives me focus an makes me feel more in control over my money versus the other way around. I used to pay no attention at all to what I was spending. Now I really think things through. It’s taught me to spend more on what I value versus just blowing it on things I don’t need like magazines.

    • “…spend more on what I value versus just blowing it…” That’s huge Tonya! Spending on what we truly value I think ultimately brings us more pleasure and fulfillment in our lives.

  14. Holly Johnson says:

    I agree that budgeting has gave me a lot more freedom. A lot of people see budgets as restrictive but I haven’t found that to be the case with our finances at all.

    • I don’t see them being restrictive either Holly. It’s comforting to know where my dollars are going and it makes it easier month in and month out to make decisions.

  15. Couldn’t agree more about the freeing power of a budget done well. Having those emergency reserves, as you say, is huge. Things that previously caused so much day-to-day stress can basically be shrugged off. And having a budget opens your eyes to thinks you’re wasting money on, which simply frees up your money to be directed to the things you actually care about. It’s not a quick process, but starting down the road of at least tracking your spending is one of the best things you can do for your finances.

    • “…of a budget done well.” That’s a good addendum Matt! it took us about 5 months to really get rolling on our budget and work all the kinks out. It is a process that takes some time – and unfortunately many people don’t want to make the effort. A good budget doesn’t happen overnight.

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