The day he moved into his newly bought, 1950’s style complete with cardboard-boxes-for-furniture home, my future mother-in-law gave her son this piece of sage financial advice:
“Write out your budget so you know how much you have left over after you pay the mortgage each week. After a few months you’ll get the feel for it and it will get easier.”
Needless to say, 10 years on, I’m pretty sure ‘create budget’ is still on his ‘to do’ list (well one of them. I keep finding vintage ‘to do lists’ tucked in various corners of the house). Because honestly, how many people actually think budgeting is sexy?
Budgeting seems to always be touted as the key to personal financial success and it makes sense. If you really have no idea where your money is going, then it’s a way to take control. If you’re on a very limited budget and small amounts can make or break you, then I can see how it’s important.
Succeeding with no budget
The truth is, we’ve never had a budget. For anything. Not for holidays or even our overambitious renovation.
Firstly we mostly know where our money goes and we’re not on a tight budget, secondly I have a small problem with details; as in, I get obsessive. I work well with master plans or with micro details, but the area in between with all its’ assumptions and generalisations is just frustrating.
When I’ve tried to figure out our budget, my end of the conversation has gone something like this ‘I noticed you withdrew $40 on Tuesday 20th March. Can you please provide an itemised list of where this was spent and I will categorise it in OUR colour coded spreadsheet accordingly? No, we only spent $24.80 at the markets and I’ve already accounted for that, see!’
I can tell you, cross examination of your spouse’s spending is not the answer to marital bliss and it’s not good for my sanity either. So we’ve learnt to live and succeed without a budget.
How? Well if you’ve ever heard of intuitive eating, that’s what we do with our money. Simply put, we think about it before spending it. The same way you might ask yourself ‘am I actually hungry or am I just bored?’ we look at a product or service and think ‘do we actually need this, or are we just buying into a marketing dream?’
Questions I ask myself before buying
These are some questions I always ask myself when presented with a prospective purchase:
- Do I actually need this or is it a ‘want’? (I’m pretty sure I really need a pink elephant stool to complete our lounge room fitout…because it’s really cute!)
- Where will I store or put it? (In the cupboard in the kitchen….oh wait…that’s where the toaster goes)
- Is it going to take up my time? (Netflix is quota free on our ISP! Of course, I’d have to watch enough to justify it each month…)
- Am I buying it for my own pleasure or to look good for someone else? (Maybe we should replace our vintage 1970’s amp with something more flashy)
- Am I buying into the dream? (If I had that new rain jacket, I’d get to the top of the mountain and look as sweat free and full of energy as that model in the great big poster on the wall in the shop!)
- Why do you want this so much? (Because then I will get external validation of the fact that I’ve made it! That’s a pretty good reason isn’t it?)
- Do you think its good value for money? (Who cares, imagine me, at yoga in THOSE!)
- How long will you actually enjoy this for? (5 minutes….wait…..did I just say that out loud?)
And if a product or service can stand up to that grilling (and few do), I don’t ask if I can afford it, because I’m confident that I’m spending my money on something for the right reason. It’s successfully kept us budget free and I’m rarely invited on shopping trips. Sounds like I’m winning!