Welcome to budgeting

One of the things that financial planners talk about a lot, when it comes to managing money, is habits.  People develop habits every day that we generally live by.  When to get up in the morning.  What to eat for breakfast.  How to drive to work – which roads to take.  How to talk to family members.  We develop habits based on past experiences and we record those experiences in our psyche then draw on those experiences on how to approach similar situations in the future as they present themselves and we call these actions ingrained habits.  If they worked in the past, we reason, they will work in the future. 

Budgeting and financial planners love to present the idea to people that changing habits will change lives.  How many times have you heard a financial professional claim – or in increasingly more numbers, just self-righteous armchair quarterbacks online – that if someone were to just stop buying that $5.00 coffee every morning, they could pay off their cars?  Because that $5.00 per day coffee is $35 per week, or $140 per month or $1400+ per year that can be put to better use?  Or stop eating out every week and save that money!  Or stop… whatever habit they think you have that justifies in their minds the reason why you are struggling financially and boy oh boy, that tone just throws the onus right back on you for your troubles.  There is nothing wrong with the financial system we live under, there is nothing wrong with the way work is rewarded – the problem is you.  You are an irresponsible over spender and if you don’t change your ways, you will be a compulsive over spender until you die and you will never get ahead. Did you notice, by the way, that the things people think you overspend on are always frivolous things in their minds?  Things they don’t like that you do, so naturally they deem you an irresponsible idiot, who deserves all the bad things coming to you because THEY deem it so?  Everything that they deem you to be irresponsible over is something that conflicts with their puritanical obsession of saving and sacrificing and doing without and by god, you are just the spawn of the desert ghoul for violating THEIR standards. 

It’s almost like there is a nobility clause attached to suffering, that you are violating because you don’t choose – in their minds – to suffer therefore be righteous as they are and instead you choose to walk the path of the devil – again in their minds - and sin against their pure and noble quest to live like hermits and scrounge and suffer and save and live like someone who is broke and never spend a dime?  They think you are frivolous and broke at the same time – quite a parallel if you ask me.  You are frivolous therefore you are broke - and you are broke because you are frivolous. You are both frivolous with your money and broke because you over spend on junk they don’t like while questioning why can’t you just cut back and be like them?  Why when they were your age, don’t you know, they lived in a really dangerous part of town but only paid a fraction of the rent you pay on your palatial apartment of 600 square feet that you share with a roommate.  And they ate crap all day and why do you have to have nutrition?  They never had it and they turned out fine!  And they never spent on all the crazy weekend things you do, like going to the gym and they will tell you this while smoking cigarettes, one after the other, that cost … what, $50 per carton now?  And they never had a new car until they were WAY>>> older and why do you need a car that is new, when you can have a perfectly fine used car?  And why are you spending so much on car repairs, didn’t your old man teach you how to fix a car?  What kind of parents did you have anyway?  In 1970 when they were your age, they knew how to take apart and reassemble their cars, they knew how to fix their homes, they knew how to do anything and everything they were called upon to do!  Don’t you know anything?!  That is the magic saver clause, don't you know? And you are doing life wrong! It's not that you are broke financially that really bothers these people - it is that you are doing life wrong. You are not living the way THEY think everyone should be and that is really the problem in the equation.

How many times have you seen an article or heard a TV report about the exaltations of a school janitor, or a cleaning person or someone who is deemed to be of lower class standing by societal standards, who always just worked quietly, never took a vacation, never splurged, never went to the doctor when sick, never married in a lot of cases, never did anything fun, just worked and went home to their meager apartment and ate ramen all the time and had terrible teeth because never went to the dentist and never spent a dime… but by golly, they died and left behind 5 million dollars in their account that they never touched and now that money can be enjoyed by… the bank.  Or lawyers.  Or other people completely disconnected from the person who never managed to do anything worthwhile in life because they never married or had kids.   That is one of the requirements for being elevated to sainthood after death, by the way, the person had to have been just an absolute societal outcast. Isn’t that just the height of absolute hypocrisy??  Do you know why the stories are always about what society deems as "lower class people" like cleaning people? Because the morality cops want you to know that you, with your choices, are not even worth as much as a simple toilet cleaner. But the same people who give you morality lectures about life are usually the ones who tend to look down upon folks working menial jobs, even though – as we all learned during the pandemic – the people who do the difficult, menial jobs, like janitors, cleaning staff, trash collectors, waste disposal professionals, etc, kind of keep the world going, don’t they?  We saw first hand what happens when garbage collectors are forced to stay home and not do their jobs, right?  The world stops. If nobody grows or collects crops, if nobody makes food, if nobody cleans up, the world stops, doesn't it?

Yet the morality police look down on these folks and only use them after they passed away to further their morality clauses.  Those of you old enough to remember the 1980s, remember that famous line that was thrown around all the time when the question of going to college was raised? "Well, the world needs ditch diggers, too" as if that was just the absolute lowest possible profession in the world. Have you seen lately what a contractor charges to do a French Drain? I have a little knowledge in this field, because my wife and I have a company where we in fact do French Drains and it is not cheap to dig a ditch. But it can save your house foundation from collapsing from the onslaught of underground water. So that entire morality and looking down upon people for their profession thing is complete bunk.

So before we start elevating the entire Le Miserable experience to sainthood, let’s examine that mentality for a moment and then quickly throw it onto the trash heap of dumb ideas because that is where it belongs. First things first. In my budgeting program – and in articles I write – I do emphasize the need to change habits to change lives.  Specifically, what I recommend in the saving money department, is if someone wants to change their circumstances in a positive way, they have to change how they allocate their financial resources by setting up an automated system where starting with a small amount they can develop a plan to eventually save a small fortune over the course of 25-30 years. 

HOWEVER – and this is a HUGE HOWEVER. 

Before anyone can take that step, there is a crucial first step they must take.  And that first step is so frigging hard sometimes, that you might feel like you have a better chance of winning the Daytona 500 in roller skates than to be able to master that first step.  Unfortunately for would be savers, that first step will determine if their long term plans will pan out and will they join the group of happy, debt free savers and homeowners or will they crash and burn on the altar of finance, opening themselves to ridicule by ignoramuses online who will point and blame them for their failures without understanding or knowing anything about the circumstances that led to the failure in the first place. 

Ok so what is this first step?  What in the world is so special about it that it literally determines if someone will be able to overcome their budgetary constraints and live happily ever after or will they die broke and in debt? What is THAT one step everyone ignores when ridiculing another person for perceived shortcomings and moral failures in their monetary course?  Stay tuned for the next article to find out… Sorry, sorry just kidding.  Ok here it is. 

Predictability. 

That is it.  That is the first step. Predictability – and Consistency. A lack of deviation from the accepted current financial standing. In other words – life. You cannot have a life – simple right?   Don’t get sick and miss work because your paycheck will suffer and you will fall behind on your bills.  Simple, right? Don’t get a car that requires emergency maintenance like flat tires because you will use your emergency savings or credit cards to get new tires and then you will be up the creek without a paddle, in debt and being irresponsible.  Simple, right? Don’t have any natural disasters that impact your home or cause you to have to go into debt to get new furniture because that is irresponsible.  Stop the rain and the wind before it starts so you don’t get into a bad spending pattern where you use your money frivolously on staying alive.  Don’t go outside and get into an accident because … that is just SOOOO irresponsible!  Don’t have a relative pass away and don’t you dare go to their funeral in another city because that costs money and you don’t have any extra money so just skip it all together.  Don’t you dare buy that extra lunch this week even though you didn’t pack one because you had no more food left and you are starving so suffer!  Go hungry so you can appreciate the $20 in your savings that you would have spent on food.  Hungry people are motivated to work hard! 

Oh, you are tired?  Well, grandpa survived WWII and when he came home he worked hard all day and made that money and managed to have clean shirts and pants every day and had an organized and efficient lifestyle and was never late to work due to some BS excuse about his kid having a fever and not sleeping all night as a single mother!  Nobody got time to hear that crap excuse. And grandma didn’t even work except did everything around the house and made sure grandpa had everything he needed to work so all he had to do is physically go to work in clothes ready for him, with meals prepared and everything proper and grandma never complained about not getting paid for chores and she only worked from 5 AM to 10 PM 7 days a week – why can’t YOU do that, you lazy Generation X or Z or Y or whatever the hell you kids call yourselves nowadays?  See?  Simple!  Predictability – the first necessary step you have to take in the budgeting process so you can start enjoying the creation of a new habit where you set aside small, but incrementally larger amounts of money every week to develop a good saving lifestyle. 

Enough with the sarcasm.  Clearly, that is nobody’s reality and if it was, they don’t need a budget in the first place – they need something else.  I’ll let you decide what they need.  For those of us living in the real world, we have problems.  Unforeseen and unpredictable problems.  So yes, I do want people who buy my course to get into the habit of saving small, incrementally larger amounts of money for rainy days and for purposes of lifechanging decisions.  Yes, I want people to change the way they spend money.  It is the entire reason why I wrote my course to begin with.  Yes, I believe that people need to change how they budget so they can do better – but more importantly, I want folks to understand that before they can do any of that, they must first EDUCATE themselves about how life works.  They must understand what the word unforeseen means – and yes, a lot of us must learn some impulse control and some discipline to start developing more successful habits. 

But what we don’t need – what nobody who is struggling already financially or trying to get ahead needs – is self-righteous, preachy know it all’s, who don’t offer solutions, only condemnation.  What we don’t need is armchair “I told you so” spouting puritans invoking Grandpa Jones about how he never spent money and lived like a hermit and so should we.  Guess what?  Grandpa Jones was born in 1920 and he was grateful just to survive the Depression and the wars he had to go fight in and didn’t have a cell phone, or humongous medical debt or student loans or a car that had a billion components or repair bills where a simple mirror replacement on a decent car costs more than the Buick Grandpa Jones bought and drove every week once to church and home because he walked to his job that was 5 minutes from his house that he purchased with his VA loan (which I will say he definitely earned) with an interest rate of 3.5% and a monthly mortgage that was about 20% of his salary instead of having to pay 50% of his income on rent and despite that needing 3 roommates to afford the astronomical housing costs.  And Grandma Jones “didn’t work” because she was told that her job was to take care of Mr. Jones like a subserviate servant all her life and tend to his needs so he can go “earn a living for the family” as if she didn’t bust her butt every day just like Grandpa, maybe even more because on top of all the chores and running a house and raising the kids and everything else she had to put up with Grandpa and his friends, demeaning her work as “women’s job” while he played cards and drank every Friday night with his buddies and played tennis or golf Saturdays while Grandma was at home running the house and “not working”. 

So let’s just acknowledge the fact the times have changed since the 1960s or the 1970s and now we must understand how to work within the unpredictable present and planning for the future is a lot more challenging than the predictable lifestyles people had 60-70 years ago when it was a LOT easier to have a predictable budget to save money in.  It is in this context that we have to develop, complete and start working within the frameworks of a budget and let’s just understand that financially it is a lot harder to do that today for a couple, let alone a single parent, than it was at any time in history.  Ok.  Now that we understand that fact, let’s start a conversation about how to manage money.  We know times are hard and getting harder.  What can we do to make it better?  We know things are difficult.  How do we approach the budgeting process in a way that makes sense? 

Let’s start by knowing that budgeting is very hard to start and very hard to stick to if we must worry about unforeseen events.  That $50 of savings per week can evaporate in minutes if you have to spend your savings on a repair bill that blindsided you and well, you have to go to work, so you need that car to work.  So first things first.  When starting a budget, you have to look at what you need to maintain your lifestyle in a way that allows you to keep your head above water.  Where do you need to be financially so that you don’t fall back?  What is the amount you need every 5 weeks to make it?  What does it take to make that happen?  What tools do you need to ensure that your budget can survive?  Figure that out first.  As the first step.  Then start budgeting. In other words – know what your goal for budgeting is, before you start, so that way when you do a budget, you can start planning for unforeseen things that will try to derail you.