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Embrace Your Budget to Attain Financial Freedom

Budgets are as near and dear to many people’s hearts as are death and taxes. Some people fear the thought of working with a budget to help manage their finances. The common refrain is along the lines of “I don’t want to be restricted by a budget; I don’t want to be constrained.”

Having helped thousands of people set up budgets, I can say, I rarely find someone who feels restricted or constrained. Budgets are liberating, budgets are empowering, and budgeting can help you break the shackles of debt and attain the most from your money. Where’s the constraint in that?

If you want the most from your money, you need to plan how it will work best for you. That’s the essence of a budget. You must embrace your budget to attain financial freedom.

Informed Spending

The main attribute of a budget is informed spending. Without a budget, funds may be allocated wherever feels right at the moment. This may lead to overspending; at best, it may lead to missed opportunities.

A budget needn’t account for each dollar individually; that could begin to feel restrictive.

But it does need to account for funds in categories: an amount for housing, for travel, for entertainment, for savings, for now, and for the future.

Knowing what you have available, what you need to put away, and what you need to live on, allows you to make spending decisions within the constraints of your income. Note where the constraint is here: It’s your income, not your budget. Failing to live within the constraints of your income leads to debt.

Preventing Unnecessary Debt

Budgeting helps prevent unnecessary debt. Not all debt is bad, despite what some financial talking heads might tell you. Not everyone was born with a silver spoon that allows them to purchase a $700K urban starter house for cash while in their 20s; most of us need to go with a mortgage, thank you very much.

Some debt, however, is very bad. Consumer debt is a financial cancer. It takes from the future what the future needs. And it often comes into being without the host being aware. 

Working with a budget (aka a spending plan) allows a consumer to see what they have available for discretionary purchases. You should indeed save up for a vacation and not go into debt to pay for it. Nor should you use debt for necessities or routine expenses. That’s asking for trouble.

Budgeting helps you see what is affordable right now. It helps you decide if you should wait on a purchase until it is affordable. It helps you avoid unnecessary debt, which robs you of your future, and eventually keeps you poorer today. Budgeting helps prevent the financial cancer of debt.

Foundation for the Future

A budget establishes a foundation for building a financial future. A solid future needs a solid foundation. To build this future, an investor needs to know what they can afford to do, the impact of making the decisions, so they can be protected from unknowns and uncertainty. That’s a lot.

The budget lets the consumer see where their money goes and how best to allocate money toward future goals. People with budgets are less likely to be stuck in the cycle of recurring debt, more likely to have funds to send their children to college, more likely to build funds for a comfortable retirement, more likely to live free of the stress and strain of struggling financially. That’s not constraining — that’s liberating. 

The Bottom Line

Attitude is indeed everything. Those who work with a budget typically develop a very positive attitude toward budgets and budgeting, based upon their lived experiences of better money management and better financial decisions made in awareness that comes from budgeting.

Those who have a negative attitude toward budgeting may have never budgeted or not been willing to live within their means, which is a recipe for disaster.

We are all entitled, however, to our own opinions. The opinions of those who have lived on a budget tend to be favorable toward budgeting and is experience based. The benefits demonstrably outweigh the costs. Budgets are indeed liberating, and the foundation on which a solid financial future can be built.

Source: Centsai Accessed 1/14/23

This article’s view is the author’s and does not reflect the opinion of any member of CentSai’s management. The author is not being paid by any financial services company nor has been paid to promote any individual product or service. The author is not a financial advisor or a broker-dealer. The content above is education-only and any reader is encouraged to seek advice from a registered financial advisor before taking any action.


DISCLOSURE: Investment advisory services are offered through Gretchen Stangier, Inc. DBA Stangier Wealth Management (“Stangier Wealth Management”), an investment advisor registered with the U.S. Securities and Exchange Commission. Stangier Wealth Management only offers investment advisory services where it is appropriately registered or exempt from registration and only after clients have entered into an investment advisory agreement confirming the terms of engagement and have been provided copies of the firm’s ADV Part 2A brochure and Part 3 documents.

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