Why you don't need a budget (yet)

Let me guess: it’s a new year, and you’ve made a few resolutions.

Your list probably looks something like this:

  • Floss

  • Lose weight

  • Run a half marathon

  • Make and stick to a budget

If you’re like lots of folks, you’ve tried budgeting before. Or you know, “budgeting”, in the sense that you knew basically how much money you had to work with, and how much your bills were, and then you gave yourself a number to stick to for your extra money. You might have even tried an app or one of those super simple online tools. So tell me, how did that work out?

There are a lot of good reasons why you haven’t been successful saving money, paying off debt, and finally getting your grocery bill under control. Some of that is out of your control, but you know that there’s more you can be doing. So you’ve vowed to take the fresh year as an opportunity to make a budget and stick to it, darn it!

I’ve got one thing to tell you: slow down.

I won’t go into too much about my background here (you can read all about it here if you’re interested), but suffice to say I’ve got loads of experience helping people who are in your situation. The situation I see very commonly is that you flail around for a few years, decide this is when you’re going to finally get your head out of the sand and figure out your money, so you decide to budget. You sign up for a new tool, eager and excited. And by a month or two later, you’ve fizzled out entirely. Sort of like your gym membership come the end of winter (you should probably go ahead and cancel that since you’re not using it). So let me use my experience to give you some advice: you don’t need a budget (yet).

Don’t get me wrong. I love budgets. (Seriously, you don’t want to talk to me at cocktail parties.) But a budget is not the right place to start if you want to be successful long term, or at least not all by its lonesome. So here I present to you my magical four steps to success reaching your money goals:

  1. Gain awareness

  2. Feel your feelings

  3. Make a plan

  4. Maintain money peace

See step number 3 there, Make a Plan? That’s your budget. Step 3! Out of 4! That’s pretty far down the list.

Now, to some extent, these steps are going to overlap or circle back on each other. When you gain awareness of your financial situation, you’re going to bring up a lot of feelings as a natural consequence, and you’re going to want to make a plan (or bury your head back in the sand). But once you do start making a plan for your money, that’s going to increase your awareness, and bring up more feelings. It’s a feedback loop in large part. Even once you get to the maintenance stage - where you’re jamming on your plan and making progress - you’re going to be running into new blocks, new goals, and new feelings, and tweaking your plans as you go.

So as you’re making your resolutions, thinking about your year ahead - start by getting aware of what’s happening with your financial situation before anything else. I’d suggest you start by simply tracking your money. I developed the Mind Over Money 5-Day Challenge just for this purpose. Every day you’ll get a 5-minute task to help you get clarity, find your money leaks, and start moving forward. It’s a great place to begin when you’re not sure what to do. Join the challenge now and get started!