Budget, diet, and other ugly words
When you spend your vacation on Lake Como, you can’t spend it somewhere else. (Image by Michael Gottwald)
It's always funny to hear personal finance experts try to avoid using the word budget.
"It’s not a budget! It's a spending plan!" As if a budget isn't a spending plan.
We humans are easy to fool, and we like being fooled. It's worth it if we get the results we're looking for with respect to what we're trying to accomplish.
We don't like limitations, though. We want to feel as though we're going to live forever, with all the time, money, and energy we could ever want. Words that encroach on our fantasy of infinite possibility receive a bad rap.
The thing is, just as constraints lead to creativity, adding limits to guide our allocation of resources helps us focus and increases the likelihood that we will have what we want. Budgeting, time management, and even dieting acknowledge the finite nature of our time on earth and the mortality of our bodies. This is why we resist them—and why they are so valuable.
All a budget does is give us a plan. I can think of ten different ways to spend a given $100; the budget ensures that I spend it only once. That is painful. The other nine options, and more, are still calling me, and it feels bad to say no to them. However, hopefully, I've chosen the best option for myself right now, based on what I want out of life. It has to be enough.
After a few years of earnest effort, I've acquired a number of hobbies. I'm starting to get to the point that there isn't time to pursue them all—or at least, not in a given weekend. If I want to make sure I fit everything in, I can make a detailed plan on paper. Otherwise, I will make a simple plan in my head, which is to choose one or two activities for a given evening or weekend and accept the opportunity cost.
I can also make no plan at all. I can drift through my free time and do whatever I feel like doing in the moment. I have noticed, however, that this free rein doesn't make me happier or more joyful, just as spending money without a budget does not. The time goes by regardless of whether or not I've accounted for it. My spontaneity does not ensure that I've used my time in the way that pleases me most. In fact, probably the opposite is true.
If, like me, the idea of planning or budgeting tends to make you feel a sense of tightness or deprivation, you might need to reframe it so that you can remember that you're the one making the choices. You can optimize for the things you care about, including freedom or spontaneity.
For instance, if I'm taking an international trip, I put most of my effort not into creating a detailed itinerary but into packing as little as possible. My "budget" is a moderately sized messenger bag that is meant to fit in on city streets. There's no way that I can accommodate everything I'd like to bring, so I have to make tough choices. Having done so, I can step off of a plane or train and do anything I want without worrying about finding a place for my luggage.
If I don't take the time to do that preparation—if, in the name of being a free spirit, I spend ten minutes shoving everything I might need into a suitcase—I will either be encumbered by unnecessary items or lacking needed ones. It's hard to have adventures on the spur of the moment when you're laden by extra sweatshirts or looking for a store that sells deodorant.
Whatever is true for travel—those precious, memorable moments we want to make the most of—will be true for life in general, which also consists of precious, memorable moments we want to make the most of. We figure out what we care about and what matters to us, and then figure out what we need to do to act in alignment with our values.
A budget isn't a punishment, nor is it unrealistic unless we make it so. It's simply a way to make certain choices ahead of time, giving our future self the guidance and wisdom we may lack in the heat of the moment. Call it whatever you want, but you can't escape the truth: We can't have everything, all the time.
As Olympia Dukakis so bluntly put it to her cheating husband in Moonstruck: "I just want you to know, you're gonna die, just like everybody else." We get to choose how to live the years (and days) we have left. We might as well have a "spending plan."
