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Have a Goal to Save Money? This Year DON’T Make a Budget and Succeed.

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by Robin

SaveMoneyNoBudget Plan

Is one of your goals to save money? Maybe pay down debt? Are you planning on, this time, sticking to your budget?

Here’s an idea: don’t make a budget. Try this on for size: this year, make a Spending Plan.

We may call ourselves a frugal family, but we don’t make a budget.  We haven’t for years.  Instead, what we make every year, and track faithfully is a Spending Plan.  In effect similar, but different in a most important way: mindset.

At their core, a budget and a spending plan are the same things… both have balancing money going out and in at their core.  But a budget suggests you begin paring down as many “money outs” as you can, often at the expense of the spending you enjoy.

A spending plan recognizes that your current spending patterns exist for a reason and you make a plan to work within them.  Sure, there may be some unused sporting goods or bloated handbag collections that could use some pruning, but much of what we spend money on can be managed and planned for.   This is like how you might balance party drinks and snacks with healthier choices in the days that follow.  Everything can fit, in moderation.  You make your Spending Plan work for you.

5 Ways a Spending Plan beats a Budget:

1. A budget feels restrictive.  It suggests sacrificing what your want to do for what you should do.  A spending plan recognizes that we must have some mad money, some makeup money and some magazine money.  (Like our Pocket Money approach to balance impulse purchases, an important part of our Spending Plan.)

2. A budget implies that everything needs to be slashed and scrimped.  A spending plan says, “Here is what you should be on spending on groceries, vacations, car repairs… now go spend it”.

3. If you fail to plan, you plan to fail.  You need a plan to get to where you want to go… the word “budget” just doesn’t carry the same forward thinking as a “plan”.

4. A budget sounds a lot like a diet.  How much more likely would you be to follow a new way of eating if you called it an “eating plan”!  The words we use matter.

5. Since Spending just sounds more fun than Saving, be sure to include lines in your plan to “Spend” on your retirement, your kids education, etc.  (You can trick your brain, can’t you?)

Have I convinced you to make a Spending Plan? I’ll be back in a few days with a post on how to make a Spending Plan that works for you. 

We think saying, “that’s not in my Spending Plan” has a way better ring to it.  Do you agree?

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Sunday 10th of January 2016

You're so right, Lesley! What a gift to teach kids to manage money when their young. :)


Sunday 10th of January 2016

This is a great approach, especially for young children with allowances.