Oh budgeting budgeting budgeting.  The bane of so many people’s financial plans.  When you mention the word budget, you instantly think of excel spreadsheets, shopping lists and a generally dull life defined by rules of what you can and cannot spend.  You can hear your financial planner saying “don’t do this, what about your financial future” and you visualise shoving an old boot in the guys mouth.

It’s an ongoing battle – you versus the marketers.  There is an entire industry, a huge industry, that is charged with the task of separating you from your money.  I often mention to clients that when they design shopping centres, psychologists and social experts are involved to ensure that you’re not comfortable in the public areas and feel a sense of calm as soon as you walk into a store, therefore making it feel like a haven away from the noise and brightness of outside.  When you have those forces against you, it’s no wonder that you’re finding it hard to cut down on your spending.

As a culture, we shifted away from basic survival and onto consumerism.  In theory, you can be really happy with very little.  Clean air, good food, the love of friends and family and your health.  These are just some of the basics.  However, we all want that new car, the longer holiday in the nicer hotel, the bigger TV, the nice clothes and to eat nice food in nice places.  We want, we want, we want… we spend.

So how do we break the cycle?  It’s really quite simple, however there is no one way that is going to work for each and every person.  With regards to budgeting, there are mainly two ways that I recommend to people, the first is attitude, the second is structural.  Attitude is just what is says – change your attitude towards money.  Move towards understanding the value of what you’re buying.  The easy way of thinking of this is to think back over the past few years, and think of all the things that you’ve purchased.  Do you remember every restaurant?  Do you remember if you had entrée and main?  Did you have wine?  Chances are, for quite a few moments, you don’t remember.  And there lied the key – if you can’t remember what you spent your money on, how much value did it really add to you?  Keep going out, keep having fun, but consider a situation where you’ll look back at what you’ve bought at that moment.  If you didn’t buy it, would you regret it?  Changes are, you wouldn’t even remember it.

The alternative budgeting method is structural, and I’ll cover that off in another post.