A common misconception I hear is that budgeting is only for those that want to pinch every penny. “I don’t have time for a budget, I’m living life!”, or “I don’t want a budget to tell me not to have fun!”. I’d argue a budget does the exact opposite. Budgeting is about maximizing what’s important to you.
For example, the most common thing people tell me they overspent on is eating out. “I bet your program tells me to stop eating out!” they say. But that’s not necessarily the case. If going out with friends is the most important priority in your life, then by all means do it. Budgeting is about understanding the trade-off of such decisions though.
I like using the diet analogy. Let’s say you have 2,000 calories to eat each day. If you eat less, you’ll lose weight, if you eat more you’ll gain weight (in this simplified example).
To achieve your 2000 calories you could eat an entire cake, or have 50 salads. Most likely you’d pick some balance in the middle. However, the most successful diets are those that are sustainable, such that you can still eat what you want, by sacrificing in areas that don’t matter as much. So you still eat that Egg McMuffin you love in the morning, but maybe just have a salad for lunch.
Your budget should be the same. If you really like going out with friends, then take that money from somewhere else. Travel less. Drive less. Buy less clothes. If clothing is your most important, then sacrifice going out. The point is to optimize your finances around making your life fulfilling, while still achieving your long term goals.
