Have you ever wondered why money is so dang hard? Or you try to organize it and put it places, but that only seems to work for a week or two. I want to talk to you about why budgets always seem to fail and never work out the way that we hoped they would. First, I’m going to walk down the rabbit hole of the failed budget with you.
It usually goes something like this. Sunday night, you bust out a piece of paper and a pencil and write down all your expenses. You write down your bills and do a best guess on what you think you spend on groceries and in other areas of your life. Then, you set your targets and go about your week.
Monday happens and going out to lunch wasn’t in the budget, but you forgot it at home. You buy lunch and figure you’ll make it up at the grocery store. When you’re at the grocery store, you can’t remember what you spent on lunch.
Then the second week happens. You’re at the grocery store again, but you don’t remember how much you spent last week. You also don’t know how much remains in your budget. So, you buy the groceries that you need because you need them. It’s kind of a nonnegotiable.
Next, you realize that you went way over budget and you feel like you did something wrong. You harshly judge yourself and decide to try again next Sunday.
The truth is always in the transactions.
The first reason that budget’s fail is because we start with guesses instead of true numbers. If you want to know what you’ve been spending, you can’t start with a blank sheet of paper in the first place.
The second reason budgets fail is because are brains dislike budgeting. There are two parts of our brain that come into conflict. We have the front part, which is where all our humanness lives. This is where we can plan and set goals and do big things.
Then, there’s the subconscious part of the brain. It is five times as strong as the front part. The subconscious is where all the doing happens. That’s where your emotions, your actions, your behaviors, all that stuff lives.
We set plans and expect our subconscious to stick to them.
This is why willpower never works. You cannot count on willpower. The front part of your brain overestimates what the subconscious can do. Budgets are set up for the front part of the brain. They’re not designed to be actionable.
Budgets are a business tool designed at a table. A good household budget is going to have more than 100 line items. You cannot keep track of everything in your mind. It doesn’t work.
There’s more to money management than having a good plan.
This leads to budget blindness at the cash register. That moment when you think you’re spending within your budget, but you have no idea how much you can spend. You’re not set up for success.
When you look at your spending, you don’t want to do it from a dollars and cents standpoint. You want to look at it from a habit standpoint. You have to have realistic expectations for yourself.
You also have to look at the habits and work on the root of the habit. If lunch is a budget buster for you, it’s not enough to say, “I’m going to spend less on lunch.” You have to say, “I’m going to pack lunch” and commit to taking the action to do that.
Trying to spend less leaves you depending on willpower and that never seems to work. That is part of the reasons why money is so dang hard.
I am hosting a two day Money Mastery event January 19th and 20th, 2019.
During this event, we’ll look at our Money Mindset and on the practical applications of money. If you want to learn The Invisible System in person, I’m going to teach it during the event. We’ll also be talking about investments and other practical money tips as well. Learn More Here
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