Less than half of Americans have a budget

Author: Ashley

26 Mar

Today’s post was written by Trevor from the Financial Nut. Trevor is a 24 year old college student. He owns his own business and will graduate from college debt free and with start on retirement. If you like this post make sure you check out his site, or subscribe to his feed for free updates.

**************************************

Statistics say that fewer than half of Americans have a household budget. Kind of scary, isn’t it? As a result of our current recession, there’s a good chance that budgeting is becoming more common, as people are becoming more and more aware of their money (or lack thereof!).

With such a low number of people using budgets to control their spending, I have to wonder why budgeting isn’t more common amongst Americans. Is it that half of us are doing so well that it’s not necessary? Certainly not! Maybe it’s because many haven’t been taught to use a budget or that people just plain don’t know how. Whatever the case may be, it needs to be something that our society changes. Much of our current economic crisis may have been avoided if we’re collectively better with money, and at the foundation of that would be having and maintaining an accurate personal financial budget.

Not Everybody Loves Budgeting

My wife and I wrote up our first budget together 2 weeks after being married. Luckily I managed to marry a girl that is fantastic with money, so we enjoyed sitting down together to draw up the plan. First we wrote down what our combined net income came to be monthly; after, we listed each expected monthly expense and found out how much it cost us to live on a regular basis. After subtracting our monthly expenses from our monthly net income, we came up with a dollar figure that could be used for savings.

As I reflect on my experience drawing up my first budget with my wife, I have to laugh at the fact that I enjoy it so much! I mean, really- I know most people don’t enjoy it like I do. I love analyzing the numbers, figuring out how we can improve month to month, and working together with Alex (my wife) on setting goals that reflect our financial dreams. I understand that it’s odd to innately enjoy budgeting!

So in the spirit of helping to convince others that budgeting must be done, I again have to go back to the original question: Why don’t people like to budget?

Many, I feel, quickly connect budgeting money with negative emotion! A well-developed budget for them means restriction and lack of recreation; in essence, it means no fun.

Leisure Money Is Part of A Well-Balanced Budget

May I suggest that any well-written budget should include leisure money to maintain healthy levels of sanity amongst the masses. Alex and I decided on a dollar figure that we would set aside every single month for fun. That money must is used for eating out, bowling, skiing, the movies, going out for ice cream, and anything else we want to do together. We call this our “Date Fund,” and I believe it’s an absolute must for any couple. The benefit? You don’t feel guilty about spending money on yourself for entertainment when you’ve planned for it!

Our budget also provides us both with a separate “Leisure Fund,” enabling Alex to spend money on what she enjoys (clothes, iPods, etc.) and for me to spend money on what I like (basketball tickets, books, etc.). That dollar figure is a fixed amount for each of us per month to do as we please. If we don’t spend it all in the month it’s provided, we can save it and use it for something bigger and better the following month. Truly a “Leisure Fund” empowers both of us to spend our money on things we enjoy without feeling guilty for it.

As you decide to either start a budget or improve the one you’re currently using, take the time to include date money (for you and your significant other) and/or a “leisure Fund” for sanity’s sake.

A budget empowers if written the right way, and no budget is complete without those items. If you can remember the positive side to budgeting money (and there are many positives), you may find yourself enjoying it just as much as me!

Ashley here: We have a “dates” category in our budget too. We also each get a fixed amount that is our own personal blow money. It works really well for us. I think a lot of people don’t make budgets because they don’t want to know the truth about the mess they are in.

pic by: cw3283

Thanks for reading. If you enjoyed this post consider subscribing!

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Filed under: Budget

3 Responses for "Less than half of Americans have a budget"

BayouJosh March 26th, 2009 at 8:51 am 1
I have to say, I tried a budget for the first two months of this year, and I really didn’t get anything out of it. It’s a great spreadsheet, complete with summary tabs and net worth calculations…the whole works. However, I found it to be too reactionary to remain interesting. That is to say, all it does is track where my money goes. Because I don’t “spend” money, there’s really nothing to budget. Since we’re trying to get out of debt, it’s not unusual to go a whole month and not spend any discretionary money. It all goes to the debt. Yeah, I buy gas and pay the electric bill, but these are things that my budget was keeping track of after the fact.

I still have the budget and plan to use it once we start spending again. I’m completely in favor of budgets if they’re used correctly. However, if it simply keeps track of where you’ve spent your money, it’s not really serving a need. For example, I was paid today and by the end of the day today, the entire check will be gone (with the exception of $50 for gas next week). I find that if I throw it all at the debt right away, I don’t need to worry about budgeting.

Great post though. Shocking that so many Americans haven’t put a lot of thought into personal finance.
J. Money March 26th, 2009 at 12:51 pm 2
well, you all know what i’m gonna say but i’ll do it anyways: Budgets ARE sexy!
Trevor @ Financial Nut March 26th, 2009 at 7:40 pm 3
Thanks for the opportunity to guest post, Ashley!