Budgeting: Why?

I suppose it could have made more sense to motivate budgeting before explaining how we do it. But, lots of people give all kinds of reasons to budget without ever giving their idea of what a budget is. And, people have very broad and sometimes loose definitions of a budget. I decided to avoid confusion and give you my idea of a budget first.

Back to the topic: Why do this? I could enumerate reason after reason, but, again, you have probably heard them all before. Instead, I will focus on how our reasons evolved over time as we went through extensive premarital preparations (retreats, counseling, etc.), talked with each other, and read a few books.

Even if you have no intention of following a budget, I would encourage you to write yours down. That way, you can see what is happening to your money every month. A budget is a money map that works in one of two ways. At first, you are standing somewhere and recording what you see around you. In this situation, your money is telling you where you are, and where you're going.

This is scary, until you realize that given some discipline, you can decide where you are going. When you take control of your budget, you slowly begin to be able to change some of the landscape to your liking.

This is where we began. We didn't want to start out our life together in denial about our money, and when we told our budget the truth, our budget told us the truth! This is hard at first. We eventually became more sophisticated in our understanding of finances, so we decided to remove some eyesores to improve our daily scenery.

Once we got married, we had over $60,000 in debt combined. Debt shows up in your budget as big, ugly minus signs. We clearly didn't like to have to make payments every month, but we hated that the payments drastically reduced what we would be able to save. To us, that path looked like us never actually having any money. If anything unexpected came up, we would have to use more debt to take care of it. But then our payments would go up. That path was just a hamster wheel!

Our budget gave us very clear motivation to get rid of that debt. Which we did. Not only do we now have some money in savings, but without those payments, we have great cash flow in our budget and can handle lots of small emergencies on the fly with the extra monthly cash.

Now, we try to look farther down the road. We have begun to ask those philosophical questions of "What is our purpose?" and "What are our goals in life?" One of our goals is to have enough wealth so that we can take care of ourselves and help other people. A lot. Our budget is the key to achieving our goal because it helps us win in the trenches of day-to-day life, and soon those battles add up! (Incidentally, you may be surprised at how many goals ultimately rely on your budget.)

That is where we are, and I still think we have a long way to go. Don't be afraid find out where you are. The sooner you do that, the sooner you can get to where you want to be.