Budgeting Sucks and Here’s What to Do Instead

Budgeting Sucks and Here’s What to Do Instead

You’re probably here because you’ve tried to live off a budget and wondering why it’s not working out.  You have good intentions of saving for retirement, paying down your debt, or steering clear of charging your next shopping spree on your credit card.  Yet somehow, you’re not able to balance your budget.  It leaves you feeling like you’re not good with money or that you’re doing something wrong.

It’s not you.  You’re awesome.  We can relate to you.  This budget thing sucks and it’s not for everyone.  We’re about to share with you what’s been working for us and for our clients.

What is a Budget?

Budgeting is the process of setting up, tracking and evaluating your spending.  Sounds easy, doesn’t it?  

Let’s face it.  Budgeting sucks.  And that’s why most people struggle with it.  It’s time consuming and made for certain kinds of people, usually those who enjoy playing around with numbers on a spreadsheet.  

We are in no way discrediting people who find that budgeting works for them.  That is not what we’re here to do.  

Instead, we want to offer our thoughts on why budgeting sucks, and what’s a solution that works.

Why Budgeting Sucks

  1. Budgets are boring and tedious. 
  2. Budgets make most people feel overwhelmed, anxious and worried.
  3. Budgets are restrictive.
  4. Budgets trigger many negative feelings.
  5. Budgets are hard to keep up with.
  6. Budgets are abstract.
  7. Budgets are too structured, while life is not.
  8. Budgets are overrated.
  9. Budgets don’t account for your overall financial situation.
  10. Budgets focus on the wrong thing.
  11. Budgets exist to control your spending. 
  12. Budgets are not empowering.
  13. Budgets can be a false assessment of how well you’re managing your money.  

Here’s What to Do Instead

The good news? You don’t have to feel guilty about not being able to stick to a budget.

Way back in our financial planning days, we were taught that budgeting was an essential component for financial success.  But neither one of us had ever used a budget, and we witnessed that it didn’t work for our clients either.

This led us to think that there must be another way.  We took a step back from our left-brain orientation to rediscover ourselves. What was it that made us happy, and what was the life that we wanted?  Once we were clear on this heart-centered vision of our lives, we reflected on our spending and realized that it was not in line with the things that made us happy.

This was the beginning of creating our Intentional Income and Spending Plan.  And since then, we’ve been using this tool with our clients.  The results have been phenomenal.

And here’s what can happen when you ditch that budget!

  • No more monthly tracking of your spending
  • No more controlling or judging your spending 
  • No more income limitation
  • No more shame or anxiety about your money
  • No more waiting for tomorrow
  • No more feeling trap in a relationship or a job 

So, what is this fabulous Intentional Income and Spending Plan?

Your Intentional Income and Spending Plan

This is an easy way for you to be in tune with your money.  It requires just a one time setup. You will be able to allocate and create the money that you need to live the life that you want.

We encourage you to involve your partner as part of this process to have a successful outcome.

Here is our step-by-step guide:

Get clear on the life you want
  • Write down the things that make you happy and the why. 
Set your financial goals for the year
  • You may have multiple financial goals.  Focus on your top three.
  • Define the amount and the timeframe by which you want to achieve it. 
  • Ask yourself if your financial goals are aligned with what makes you happy.
Simplify your banking
  • Chequing Account:  Set up one chequing account for the purpose of depositing your income, paying your bills, daily expenses and savings.  When withdrawing cash from your account, determine the type of expenses that you will be utilizing cash for. 
  • Savings Accounts:  Use this one account to set aside money for your short term and mid term expenses or  you can set-up more than one savings account, to ear-mark for specific short term or mid term goals.
  • Credit Cards:  Decide which types of expenses you plan to charge to your credit card, and stick with it.
Get in tune with your expenses
  • Review each expense and ask yourself ‘Is this supporting my financial goals and are these the things that make me happy?’. 
  • If the answer is yes, how so?  
  • If the answer is no, consider removing this expense.

Get in tune with your finances

  • Hire a money mentor with a financial planning background to assess your financial situation and recommend the best use of your financial resources, to have the life that you want today. Make sure that they do not sell financial products. 
  • Review existing debt to explore best options.  
  • Review monthly payments for insurance coverage (life, disability, critical illness, accidental death & dismemberment, long term care and health)
  • Review monthly contributions toward your investments.  
  • Assess liquidity for quick access to funds if needed.
  • Implement recommendations.

Create your intentional spending plan

  • Allocate your money based on your findings above and what makes you happy.
  • Add new expenses and adjust your current expenses.
  • During this step, you are creating a flow of money to support your financial goals and to fulfill the life that you want.
Create an intentional income plan
  • Sum up all your intentional spending.
  • Determine if your income is sufficient to support this amount.
  • If yes, no other action needed.
  • If not, then explore the possibility of making more money or accessing your money resources.

How to live a life with your intentional income and spending plan

  • Give yourself the flexibility to maneuver your income, expenses and financial resources.
  • Continue to reflect on the things that make you happy, and use this as a measuring stick on whether you’ve succeeded to create the life you want.
  • No more need to track your spending.  To check in on how you’re doing, it’s as simple as glancing at your chequing account balance to see if it’s what you expect.  

While embarking on the journey of creating your Intentional Income and Spending Plan, be open to acknowledge any money blocks or money myths that might pop up.  Challenge these thoughts as they appear. Also keep in mind that this money thing is a journey.  It’s not a destination.  Continue to remind yourself about the things that make you happy, and your heart-centered vision of your life. 

In the comments below, let us know how this budget thing is working out for you.  And if you’ve already ditched that budget, let us know what you’re doing instead.  

With love and gratitude,

Marlene and Thuy

 

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