One of the primary services I provide is assisting my clients with preparing budgets.
I’ve noticed that clients only ask for help with a budget when they’ve gotten to the point where they don’t know what else to do. The word “budget” seems to invoke fear and resistance in the minds of many people. To encourage people to work on a budget, I often refer to budgets as “spending plans,” thinking that people might get lured into completing a “spending plan.” I was wrong in my thinking as people appear to resist working on spending plans too.
As I don’t usually manage to lure people into preparing their budgets with sneaky language, how is it that I end up helping so many people with budgets?
Simply said, budgets work to help you get unstuck.
I see the tremendous power of budgets in my work, helping people navigate their separation and divorce. Navigating a separation process is possibly the most challenging job anyone can do as you manage a complex life transition in which most aspects of your life are changing. You are also looking ahead while sporting a pair of “Negative Outlook” glasses. Yes, your future seems dire, and so you are likely asking yourself: “why would I make a decision that will just lock in my worst-case scenario?” So you don’t. You remain stuck, wondering to yourself how you ever got to this horrible place in your life. Then, you usually avoid making a decision while you blame the bad luck and the bad choices that brought you to where you are.
While you may possibly avoid ever taking another step forward, there is that other tricky aspect of your separation process: your partner. Your partner is apparently ready to embrace their future right now! Is that not one of the reasons why you are separating? You and your partner are just not right for each other, so why would you be on the same page when it comes to your separation?
So, while you drag your heels, your partner is on the other side, demanding that you make a decision. And when you don’t make that decision, your partner starts making them for you. And if you still resist, then your partner gets other people to encourage you to start making some decisions. Those other people? Usually, lawyers who send you polite letters (with thinly veiled threats) somehow costing you thousands of dollars and considerably more stress. The decisions end up being made by professionals who know nothing about you or your life.
Instead of having a decision imposed on you, what if you started to figure out what you need in your life? And I’m not merely talking about the money you need in your life.
Of course, a budget won’t tell you everything you need to know about yourself, but it’s an excellent start. Where do you spend most of your money? Are you a foodie, or do you like clothes? Or maybe you hate cooking and get a lot of takeout, or you’re exhausted from working all the time and get a lot of takeout. Or perhaps you consider takeout evil and insist on preparing your own meals. Are the majority of your earnings going to housing? Or is it going to leisure time? Where is the money that you spend come from? A job you love or a job you hate?
As you start to categorize your earnings and spending, you begin to gain insight into your life. At the same time, you are gathering critical information about where you stand financially in life. Information that you are going to need as you navigate your separation process. How could you possibly know what you need post-separation if you don’t even know what you have now?
What if I also told you that a budget takes about three hours to do? These days, you can find helpful apps online, you can also talk to your banker or investment advisor to help with this. In fact, financial literacy month is coming up. Almost every professional organization that provides some type of financial service will likely have a resource you could use to build a budget.
Have I convinced you of the benefits of budgeting yet?
I’m going to guess that I haven’t. After all, I’ve been preaching the benefits of budgeting for years, but I have yet to get a client who comes to see me proactively to prepare their budget. I will see you when you have nowhere else to turn.