Money Management – Budgets Are Like Diets, They Don’t Work Without Additional Insights

Budgets are like diets – most don’t work for the long term. Actually they do work temporarily but to reap lasting rewards we must accompany them with a lifestyle change. This may sound like a huge adjustment, a move beyond your comfort zone, but personally I didn’t find it as such a big deal when I did it.

The thing that made it an easy adjustment was that I was sick and tired of continually paying bills. But if you can envision a better way of living, less stress, more freedom in your future, these things can be brought about by a few adjustments in your daily routine. Lets get at it.

Examining my behavior and my lifetime of experience showed me that from a very early age I focused on bills. I continually struggled with paying or catching up with my payments. Right then and there I accepted that I had been focusing on bills for more years than I wish to admit, and I should change my focus.

As long as I focused on bills all I got was bills.

When I focused on freedom what I got was freedom. (That was after a period of transition).

O.K. so I realized that having bills, especially past due payments created stress. I felt I had to drive harder, earn more etc. and eventually that lead to my spending money on something to feel good – to escape the stress. Those ‘feel good purchases’ stole most of the best things in life from me. Don’t forget ‘the best things in life are free’.

Actually I’m a recovering alcoholic. I’m now sober more years than I drank. The habit of spending to escape depression and low self worth didn’t apply only to alcohol. Having material things seemed to boost my self image. But that only lasts until the newness wears off. So how does one develop a lasting feeling of freedom and self respect?

We need to bring about a meaningful lifestyle change and the place to begin is to change our thinking. Once we train ourselves to think differently, our feelings will follow shortly after. Mine did. To be honest I needed to stay focused on ‘the vision I believed in’, which included freedom and peace of mind.

Freedom from payments became more important that buying things. It became obvious to me that regardless of how much money I earned or how successful my business became there would never be enough to buy me freedom.

Freedom is not a measure of wealth. Freedom is available to everyone who chooses to embrace it.

As a *certified financial planner I meet people at every economic level. There are both rich and poor folk who are relaxed and others who are stressed. Some entrepreneurs lead very well balanced lives. But there are other entrepreneurs who think they own a business, but as I see it, the reality is; that the business owns them. Who wants to trade the rewards of community and family for a career?

There isn’t enough money on the planet to entice me to become a slave to a business. I was there once as a young man, and I have no plans to return to that type situation. Today I’m self employed, but I work about 20 hours a week. That’s appropriate for me, my family is all grown and on their own now so I don’t earn a fortune. I don’t need it to feed my family and I don’t need it to feed my ego. If I had my youth back I would spend less time at work and spend less money. Close personal relationships with my family is worth more than extra money or extra material things. A present for a child will never replace being present n their lives.

So how does one change their attitude?

By keeping the ‘goals of real value’ in top of your mind no matter what. These goals are not material in nature. Don’t fool yourself by saying you need more money, a trip around the world, or a newer model car. These are secondary goals and often distract us, even rob us of what we really want.

Set meaningful goals, such as freedom, and self respect.

Self respect means you respect yourself. It doesn’t matter one little bit what your neighbor or your boss thinks of you. What really matters is what you think of you. Dancing to someone else’s tune or expectations isn’t always a good thing. I can sit down with a very wealthy person or a famous person and not be a bit intimidated today, because I respect myself. What you think of me isn’t as important as what I think of me. It wasn’t always that way and it didn’t change when I was earning great money. The positive change came about when I finally decided my bank account had nothing to do with my self respect.

Rewrite your life script.

Set real goals that have nothing to do with a career, money, or material things. I’m not saying those goals are bad, in fact you need them also. The problem comes when people focus on those things so much that they overlook what is of real valuable in life. When our feelings have been redirected our habits will also change. Then we no longer need to count calories or pennies.

How to Fix Your Budget

First thing to do if your spending is off track is to use one of those budgets that I claim don’t work. Like I said they do work temporarily. Recording every cent you spend in a day, shows you what costs you the most money. Doing it every day for a week will reveal how your habits affect your life. The next thing is to tally up the major payments including loans, rent, mortgage, household expenses.

The second step is to examine our motives. “The love of money is the root of all evil”. That was written about two or three thousand year ago in the Old Testament and was repeated frequently by my mother. Boy if only I had listened to her or even tried to understand the depth of meaning in that phrase. It could have changed my entire life for the better.

Another way of framing the problem is: “The search for happiness is one of the chief sources of happ-un-iness” Eric Hoffer

The Feel Good Purchase is a troublemaker.

If we have a good feeling about ourselves we won’t need to buy an item to feel good. If we buy things we really don’t need to make us feel better we may be buying things for the wrong reasons. Some people buy things because the neighbors have one and they just have to keep up. Our self image is damaged if we worry that the neighbors may think poorly of us. Personally I believe that ‘what others think about me is none of my business’. That’s a quote, but I forget who wrote it. I like it and I try to live by it. One exception is to ask feedback from friends who are balanced and not afraid to tell me if I am off track.

Another ‘feel good purchase’ is for something that chemically induces a good feeling. Alcohol and other mood altering substances, chocolate and a number of foods can also be part of this category. Basically if I feel good about myself I don’t need to use something to feel good.

Another example is buying a car, boat, shoes, bike or clothes for style rather than for functionality. If propping up our ego is the reason to buy something, it may not be smart shopping. All things don’t need to be just practical. Life should have some flavor to it. But our self worth should not depend on external things. I once heard a lady doing a presentation on TV on how women could empower themselves. The program was excellent until she stated that “your self worth is equal to your net worth”! I really feel sorry for that poor woman. How pathetic is the life that’s so shallow that a person needs to surround themselves with glittering shiny things or a big bank account to try to make themselves feel good about who they are?

The Solution

So to recap. Check where your money is going. Why it is going there? Specify the things you buy for shallow reasons. Now for the final piece of this puzzle – stop buying stuff just to feel good.

It is OK to be Wealthy – it ‘ not OK to think you need to be Wealthy to ‘feel good’ about yourself.

* certified financial planner = in my case it’s similar to physician heal thyself. At a deep subconscious level some people are attracted toward professions where they personally experienced weaknesses. Many social and family counselors come from broken or dysfunctional homes. Out of our weaknesses comes our greatest strengths. I believe that someone who has survived a dysfunctional experience and recovered, combined with professional training, is better equipped to coach me toward a solution that is someone who just learned it from books.

By Suzana