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  • Writer's pictureBrad Wooten

Budget. It's not a 4 letter word

Updated: Sep 23, 2020

So many people hate budgeting. Some think they make enough to not have to budget while others can't wait to make enough to not have to budget. Budgets feel like constraints that are put in place to limit our spending; to limit what we can do and, perhaps more dramatically, sometimes to even limit who we are.

If this is your view of budgeting, you're doing it wrong.

Mirriam-Webster has some interesting definitions, but we'll use this one: a plan for the coordination of resources and expenditures or the amount of money that is available for, required for, or assigned to a particular purpose.

There is no reason a budget should be seen as limiting or restrictive. Okay, maybe there are a few reasons. For example, if you want the budget to limit your spending in a certain area. Or if you have a habit of spending more than you have. In these situations, the budget can in essence limit or restrict spending, but the intent is protective, not frivolous. In my opinion, budgets should be seen as freeing: You have the freedom, to spend without guilt, on whatever is in your budget!

The point is: The budget is yours. You set it. You control it. It should be a guide and a plan that is based on your priorities, your goals, your principles. Without a budget, you are spending in reaction to events instead of intentionally. Without a budget you are either vaguely aware of what you make, spend, and save (at best) or completely unaware (at worst).

So what should you do to get started?

  1. Record what you spend (I use YNAB and love it). You have to start somewhere, and knowing what you spent your money on is a great place to start.

  2. Set spending goals (i.e. make a budget). Again, these are based on what you have available and your priorities. If you want to go out to eat every day and have enough money to do it, then go for it! Now that you have an accurate record of your spending from step 1 you have some data to start with in setting a realistic budget.

  3. Review and compare. Making a goal budget on a sheet of paper and sticking it in a drawer does no good. Now that you are tracking your spending and you have spending goals, review them. Are you going over? Do you need to make adjustments? Are any of the areas unreasonable? Did you forget something?

The key to a good budget software is the ability to accumulate funds in a category and move money around. Find a program that is like a virtual envelope system. The key is that money put into a category carries over from month to month and can easily be moved between categories when needed. Essentially, you need to find a way to assign money to a specific purpose.

Having $6,000 in your checking account doesn't help you make good decisions. However, having:

$500 in groceries

$2,000 in savings

$1,500 in property taxes

$750 in insurance

$250 in entertainment and

$1,000 in mortgage payment

$6,000 in total

is extremely useful. Now you have the information you need to make decisions. Budgeting isn't just for the frugal, just for the poor, or just for the nerdy. It's for anyone who wants to be intentional with their finances. Show me someone "doing just fine" without a budget and I'll show you how they could be doing even better financially if they had one.


Read more about me. I enjoy helping individuals with their taxes, businesses (including nonprofits and churches) with tax or accounting and other finance related questions, and I also enjoy helping people resolve tax debt, liens, levies, or other tax help you may need. I live in Lake Nona in Orlando, Florida, but I serve clients all across the country. Schedule an appointment if you need assistance and take a look at the resource page.

*The blog posts (as well as the YouTube channel) are my personal opinions and thoughts about a wide range of topics. They are not meant to apply to individuals specifically and should never be relied on as tax or investment advice. You should contact a professional for specific advice before taking action.

I don't have any affiliation with nor do I receive any financial benefit from YNAB. I have used it personally for 10+ years.

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