Spending money is easy. Spending money without guilt is hard.
If our budgets were boats we would all have a few leaky holes. The leaky holes represent budget categories where we tend to spend excessively and unintentionally. The intent of a budget is not simply to tell you not to spend, but to help you spend your money properly. In fact, a common budgeting downfall is restricting yourself too much in categories where you enjoy spending money.
To make budgeting easier and more enjoyable, I suggest identifying the areas where you enjoy spending, so you can accommodate them by making other budget cutbacks.
What do you like spending money on?
While I am not a flagrant spender there are certain items I enjoy spending my money on. My three top spending categories for pleasure are:
- Vacation and travel.
- Dining out dates with my wife.
When my wife and I set our budget we always make room for these items, typically by cutting back on other categories. For example, my wife has mastered the art of frugal cooking. Saving on groceries allows us to eat out occasionally. Also, we minimize our eating out so that it is more special when we go out together.
Another way I try to make room in my budget is by trying to find the best prices on books. This way I get a lot more bang for my buck. I research a lot of money-saving ideas when we plan a vacation (here are some ways to save on your next vacation). Just because something is in a splurge category doesn’t mean you shouldn’t try and get more with less.
Remember, if you say ‘yes’ to one category, then be sure to say ‘no’ to another.
Have you ever returned from a shopping trip with a car load full of stuff, an empty wallet, and troubled memory (forgetting what you spent money on)? This is a sure sign that you are spending money on things you don’t really need or care to buy. This is reactionary and impulse spending.
How ‘System’s Theory’ Helps us Understand Budgeting
A budget is a system. And in a system, each individual part is interconnected; the function of one part always impacting the others. When it comes to spending we must recognize that problems belong within the system, not the individual part.
Consider your spending relationship between a clothing budget and an entertainment budget. If spending in the clothing category goes up, then spending in the entertainment category must go down. If you want to rob Peter to pay Paul that is fine, but it is not an option to rob both Peter and Paul. If one part increases, the other must decrease.
Three Rules of Guilt-Free Shopping
- You must always have a clear sense of what you most enjoy buying.
- You should make room in your budget so you can say ‘yes’ to items you enjoy buying.
- Because your budget is an interconnected system you must say ‘no’ to some budget items.
If you properly balance ‘yes’ and ‘no’ you can enjoy guilt-free shopping.
What do you like spending your money on? How do you make space for that item in your budget?
Photo Credit: Thomas Hawk