The Freedom of Budgeting

The dreaded “b” word of personal finance.

Budget.

If you’re like many people, you don’t like budgets. You believe they’re restrictive, and you don’t want to be tied down and not be able to spend your money.

I used to feel the same way, but I realized (after actually trying a budget) that the common misconception that budgets limit your spending couldn’t be further from the truth.

In fact, budgets actually give you the freedom to spend your money however you want.

Related: Budgeting Tips for Beginners: A How-To Guide

A plan for your money

Your budget is simply a spending plan for the month.

It allows you to see exactly how much money you have coming in and plan exactly where it’s going.

Yes, you include your bills and other obligations, but you can also include fun things, like vacations and dinners out.

Mr. TMG and I include date nights in our budget, as well as money for each of us to spend no questions asked.

In case you’re wondering, I typically spend mine on br/lunches, makeup, and fashion. If I want something expensive, like a pair of shoes or a purse from a luxury designer, I save up some of this money each month to buy it.

We can spend money on fun things without worrying about whether we’ll have enough to pay our bills and without feeling guilty about spending it.

We plan to spend the money, so when we spend it, there’s no problem. There’s nothing restrictive about being able to do things we enjoy guilt-free.

Progress on financial goals

A budget can also help you make progress on your financial goals. Because you plan where your money is going, you can decide to put whatever amount you want toward your goals.

Our budget has been huge in our debt payoff journey.

Before we started budgeting, we had no idea how much we were spending in each category. We always made sure our bills were paid, but I couldn’t tell you where the rest of it went.

After we started budgeting, we were surprised at the amount of money we had available. The money was there before, but because we didn’t have a plan for it, we didn’t realize it.

Since we made a plan to pay off our debt, our budget has been amazingly helpful. It has helped keep us on track because we can easily see how much money will be left after paying our bills and other obligations.

Typically we use that leftover money to make an extra payment on our debt each month. Check out our progress on paying off our $670,000 debt here.

Related: How to Pay Off Debt Fast: The Debt Snowball Method

Think about your financial goals.

Do you want to pay off debt? Save for a vacation? Start investing?

Whatever your goals, knowing how much money you’re bringing in each month and intentionally allocating that money will help you reach your goals faster.

Related: Starting from the Bottom: Staying Motivated to Reach Your Goals

Flexibility and control

With a budget, you are in control of your money. You’re telling it where to go at the beginning of each month instead of wondering where it went once the month is over.

When you create your budget, it’s not set in stone. It’s a reflection of your priorities at the time you made it.

Your priorities may shift, and you can re-work the budget to reflect that.

If an unexpected expense comes up or you decide you want to spend more than originally planned in a given category, that’s okay.

You’re in control, remember?

Side note: It’s helpful to include a small buffer amount as a miscellaneous category in your budget to help offset any unexpected expenses that pop up.

If you decide you want to spend more on going out to eat this month, for example, decide where you’re going to spend a little less to free up the money for the increase.

It may be that you decide to spend less in a single category or that you spend less across multiple categories to cover the increase in your eating out budget. The key, though, is that you’re in control, so it’s completely up to you.

Freedom

Remember how I talked about the freedom that budgeting affords at the beginning of this post?

It’s more than just the freedom to spend on designer clothes or going out to eat guilt-free.

Yes, you can plan for the things you want and buy them guilt-free because they’re in the budget so you practically have to, but it’s the feeling of having complete control over your money that’s really freeing.

You determine your priorities and control when and where your money gets spent.

No more wondering where all your money went at the end of the month.

No more panicking when unexpected expenses come up.

You can make progress on your financial goals because you know exactly how much money you have to work with.

In short, when you have a budget, managing your money becomes much less stressful. 

Do you budget? Why or why not? If you do, what’s the biggest benefit you’ve seen with budgeting?