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7 Ways to Change Your Thinking About Budgeting


Budgeting is an important financial strategy, and possibly the most important strategy for financial success. However, many people approach budgeting with the wrong mindset or the wrong ideas for what budgeting is. If you begin to budget with harmful or disruptive ways of thinking, you might minimize your potential benefits from the practice.

Fortunately, there’s always time to improve.

How to Change Your Thinking About Budgeting

These mentality changes and philosophical differences can improve how you budget:

  1.       Mistakes can be a good thing. Too many people think of budgeting mistakes as catastrophic. If you go over budget in a certain category, or if you lose track of your spending, it’s the end of the world. But this is problematic; first, catastrophizing small mistakes may cause you to give up budgeting altogether because of a simple error. Second, mistakes can actually be a good thing when budgeting. Acknowledging a mistake is a sign that you’ve improved your financial knowledge, and studying the factors that led to this mistake can help you improve your approach in the long run. Treat your mistakes as learning opportunities, rather than total failures.
  2.       Your budget is a loose guide. Your budget functions as a financial path for you to follow, but you don’t have to treat it as if it’s chiseled in stone. For most people, a budget functions better as a loose guide than a strict dogma; if you allocate $200 to entertainment for a month and you end up spending $220, it’s not that big of a deal. This mentality will help you learn to think about financial decisions in terms of how they fit within your big-picture goals, rather than overly scrutinizing details or micromanaging every little choice. It’s better for your finances as well as your mental health.
  3.       Budgets can (and should) change. When you create your first budget in your 20s, it’s easy to think of it as something that will last you indefinitely. But the best budgets are ones that change in response to new situations. When you get a new job making less or more money, you’ll need to update your numbers. If and when your goals begin to change, your goals will need to change in time. Maintaining an attitude of approachability will make it much easier to weather unexpected changes and adjust your life to achieve new goals.
  4.       Formulas don’t work for everyone. Online, you can find hundreds of budgeting models that are designed for a general audience to use. Some of them promise that their budgeting formula will lead you to financial success. However, these established formulas and formats typically don’t work for everyone. People think and make decisions in different ways, and therefore need slightly different methods of budget planning; for example, some people need a visually intuitive model, while others prefer something more formal and precise. Some prefer to get into narrow details, while others prefer big-picture planning. There are no wrong answers; it’s all about what works for you. 
  5.       Budgeting can be fun. Budgeting always sounds like a chore, and it’s treated as an unfortunate necessity of life by many. But it’s much easier to stick to a budget if you can find the fun in it. Depending on your personality, you may find it interesting to set and achieve financial challenges for yourself, or you might enjoy the thrill of figuring out how much money you saved in a specific category. Make a game of it, and figure out a way to find joy.
  6.       Consistency trumps perfection. One of the most important factors for success with budgeting is consistency; if you follow the same tactics and adhere to your goals every month, you’ll set yourself up for success. This consistency is far more important than accomplishing everything perfectly; it’s better to have 12 straight months of decent budgeting success than a single month that’s practically flawless.
  7.       The past shouldn’t dictate the future. When budgeting, it’s all too easy to get fixated on the past. You might beat yourself up over past mistakes, or you might assume that the costs you’ve paid in the past are somewhat fixed (like the cost of subscription services). Open your mind to the idea that the past is the past, and you have total control over how the future plays out.

Changing Your Mentality

It can be tough to change how you think about a concept, especially if you’ve done it for many years. Don’t get caught up in trying to change overnight; instead, commit to small, consistent changes that gradually convert you to a different way of thinking. Repeat new ideas to yourself frequently, and evaluate your decisions and instincts to determine which underlying philosophies are motivating them. In time, you’ll get to where you want to be. 


So, what do you think ?