From my "research" (aka, rudely asking people, often at bars, how they run their lives), I gather that budgets are not super popular. Almost everyone feels that they ought to have one, promises themselves or others that they're going to get right on that, and secretly rejoices that they don't waste their time on something so obviously pedestrian and boring.
I've had a budget for years and years. I, myself, might be a little pedestrian and boring, but it's not because I have a budget. Having a budget, in fact, is the number one reason I'm able to have fun. It means that I'm able to take a cold, slowed-down look at what's coming in and going out and know for certain, at any given time, whether something I want to purchase or do fits into my overall plan. And if it does, I'm entirely free to enjoy it without worrying that I'm overextended.
I can give you lots of tips on where we cut corners and save our pennies (and I totally will!), but if you don't have a budget, you're not using the best tool available to make sure that you're spending your money (that is to say your time, effort, and labour) on the things that make your life worthwhile.
That sounds so obvious! Yet, I run into the attitude, all the time, that a budget is there to make one "save money", to prevent one from spending, to curtail any inclination to hedonism at all costs.
Here's a budgeting story: when my oldest kid was about twelve, his class did a couple of days of pretending to set up a budget. They were given a certain income for the month and then they had to work out how much money they were going to spend on housing, food, transportation, etc.. (they were given some pretend rental ads and other information to work from). As far as it goes, that was fine.
Except that my poor kid failed this exercise because he spent 'too much' on food. The teacher had a sample sheet where each category of spending was meant to add up to a certain percentage. Housing was between twenty and twenty-five percent, food was something else, transportation was ten to fifteen, etc.
My kid, no stranger to how budgets work, went at this problem from a totally different angle. "What is the thing that I like the most? What don't I really care about? What makes me happy? What might make me depressed?"
He was twelve at the time, so there's a good chance that he underestimated his tolerance for living in a basement studio (the cheapest option for housing), or eschewing car ownership in favour of the bus (cheapest transit - and, incidentally, how he gets around five years later), but he knew what he loved, and that was eating all kinds of different foods.
I have so many pictures of this kid sitting down to eat something exciting with a huge grin. He may not have understood the point of the classroom model, but by spending over half of his available cash flow on food and restaurants, he clearly understood the power of reserving his money for the things he adored.
When you're twelve, you might have to make a pretend budget according to the sample sheet (lest you fail), but as an adult, the entire point of having a budget is to spend money on things you care about and minimize how much you spend on things you don't. Before you drag out your bank statements and calculator, spend a little time thinking about what you really like and what you think is important.
Next week, we'll talk about how to make those abstract values into a concrete plan: a budget.