Broken Budgeting

When discussing budgeting with others I’ve found that most people see budgets as a fairly negative thing—a self- or spouse-imposed restraint that limits them. With this perception of budgets it’s no wonder that most of us don’t really create a monthly budget, or if we do, we’re quick to admit that we struggle to “stick to it” and “stick with it.” At least that’s how I felt the first 27 times I tried budgeting.

I think Wikipedia’s opening line on budgeting captures a better definition than what we usually hear:

A budget is a quantitative expression of a plan for a defined period of time…It expresses strategic plans of [organizations] in measurable terms.

Shifting my perception of budgeting from straight-jacket to strategy changed my life. I finally started to realize that my budget could free me from financial fretting, it could help me execute on a vision for my desired future, it could be a tool that I used to control my money.

Why I budget today

When I budget I’m hoping to get a few things out of it:

  1. I want to have conversations about money.
  2. I want to spend every dollar with intention.
  3. I want to minimize surprises in my finances.

But it’s hard to get these three things out of budgeting, it requires checking records, recording expenses, long budgeting meetings, a great memory, and incredible consistency. Because of all these challenges it’s easy to feel like budgeting is broken and just give up on it.

What’s actually broken?

Budgeting isn’t actually broken, but most of the tools for budgeting are. But I don’t think budgeting tools need to be broken, that’s why I’m setting out to design a better one.

I want to create a tool for budgeting that facilitates real conversations about money. In my experience some conversations are conceptual as we discuss our desired annual income from investments at age 60, while others are extremely tangible as we discuss the pair of Reebok shorts I want to buy this month. Both conversations are important and have the power to determine our success or failure. Both probably don’t happen as often as they should.

I want to create a tool for budgeting that isn’t about shuffling dollars between categories once a year and then hoping for the best. I need to be able to think about and plan around the actual dollars I’ll be spending in a given month. And not just some of those dollars—every single one of them.

I want to create a tool for budgeting that helps me plan ahead. That means planning ahead for my retirement, for my annual insurance payment, and for that vacation to France in three years. Knowing there will rarely be a surprise that jeopardizes my ability to cash flow the expenses of any given month.