How to actually live with your budget

A good budget is a beautiful thing – a perfectly balanced harmony of words and numbers, woven together like an exquisite tapestry. It feels good to put together and it looks great on the wall.

But it’s not really there for looking at. It’s supposed to help you get from A to B. It’s supposed to help you pay down debt and build savings and fix your credit and get a house and maybe remember to buy some broccoli once in a while. A good budget is a theoretical framework for how to successfully handle your money, but it doesn’t do any of the actual work for you.

So that’s the thing – you’ve got your budget. Now what?

Check your habits at the door

No Excel sheet, no matter how handsomely formatted (with the fonts just so and the formulas! Oh, the formulas…), can change your habits. It’s one thing to say, “I’m budgeting $75 for miscellaneous expenses this month” and another thing entirely to know where that adult-sized bouncy house you just bought fits into all that.

In order for your budget to work, you’ve got to change your relationship with money. No matter how you and your money have abused each other over the years, you’re going to have to get over it, because you’re going to be working together very closely from now on.

To put it another way – your budget won’t work if you keep doing the same things you’ve been doing all along. Your patterns, your preferences, your habits – they all need to change. Forget everything you know about where your money goes. It isn’t easy, certainly, but your spending habits are like the 6 Million Dollar Man (the budget-sized version): you can rebuild them; you have the technology!

Your budget is a mirror

You’re very unlikely to last long on a budget if making it work requires that you change every last bit of how you live your life. The point is to change your relationship with your money, not your relationship with friends, family, work, food, fun and everything else that makes up your life as you know it.

The trick is to think of your budget as a mirror – a funhouse mirror. I don’t generally recommend thinking about funhouses in any context because clowns often live there and clowns are terrifying, but consider those distorted mirrors. What you see reflected back resembles what you’re used to seeing in the mirror, but some parts are smaller and some are larger and there’s some compression here and an elongated forehead there and so on.

Just like a funhouse mirror your budget needs to resemble your previous life, just shrunk and stretched in certain places. Rather than a complete overhaul, look at what you do and where your money goes and start making some subtle manipulations. They’re much less painful than non-subtle manipulations and much more likely to stick.

Flexibility is key – plan for some expansion and contraction

Budgets are usually pretty inflexible on the income side of the ledger, but your expenses are rarely so rigid. The tighter your budget the more important day-to-day flexibility will become. As one category goes over you’re going to have to shift funds from another category in order to keep things in balance.

And just like most 6th grade science students can tell you, certain materials will expand or contract depending on the temperature. The same goes for your budget. If you come in under budget one month don’t run out to the thrift store and go on a tag-poppin’ spree. Chances are good you may very well come in over budget next month.

Remember, your budget is a framework designed to help you reach your goals. It should be constantly evolving in response to the reality of how life around you changes.

In conclusion…

Living on a budget isn’t easy and the transition from “I do whatever I want with my money” to livin’ the budge’ life can be a brutal one. The key is to be realistic, flexible and diligent. It’s hard work, especially in the beginning, but when true financial freedom is the end result, you know it’s worth the effort.

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.