You’ve heard me say it again and again, but as we enter a new year, I really want to encourage you to take the changing of the year to look at starting to budget – especially if you haven’t done it before. But I’m going to let you in on a secret about budgeting.
Here’s the thing about budgets: there’s no such thing as a perfect budget.
My budget is not your budget. And while you think this has to do with income and expenses, the secret is that budgets have less to do with money and more to do with values. Remember, money is a medium of exchange of value.
The other day a friend found out I’m researching a new gym. I mentioned I was interested in a MegaGym near my house – partially for the hot tub – and he said “wow, I heard MegaGym was really expensive”. Initially I was shocked, because at $39 a month, it was the cheapest gym I was considering. For the past year, I’ve been spending $79 a month on Classpass, which allows me to go to high-end fitness classes all over the city – so half of that expense sounds like a deal to me. I work out nearly every single day (sometimes I take a weekend day off) so this is really important to me. While I’m a former athlete and coach who can design my own fitness program, I enjoy the fancy classes because I like not having to think about what to do at the gym.
Now this isn’t to sell you on the idea that an expensive gym membership is important for you. I don’t get any sort of payout from Classpass. This is to show you that MY budget is completely different than my friend’s budget. A regular fitness program is part of my values – I value my health and I value the community of a tight-knit smaller studio. When it comes to fitness, I know what works for me and I’m willing to pay for quality. I have made the choice to make my budget reflect my values. I am willing to spend a little less in other areas – dining out, drinking alcohol, renting a smaller home, not owning a car, in order to splurge on the things that* reflect my VALUES.
My friend spends $10 a month at a discount gym out in his neighborhood and gets a perfectly fine workout. But he also chooses to live in a smaller community that is far enough from his job that he spends 1.5 hours a day commuting in a car. This is a choice he’s made because he wants a certain kind of home for his family. His values of family & community have led him to a different budget: he wants to live in a smaller community for his children and he wants to have a larger house for his hobby projects and his family.
Both my friend and I make tradeoffs in our budget. He’s willing to drive and own a car- I am not. I choose to live really close to my job and share a small apartment, which means I don’t need to own a car. The average American car payment is $364/month – I am happy to allocate my dollars elsewhere.
While my friend was floored by my $80 a month on fitness classes, I wouldn’t want to spend every day commuting in a car. This isn’t a value judgement on either of us; this is about WHAT I WANT to get out of my money to reflect my values and what HE wants to get out his budget to reflect his values. The basic tenant of budgeting is “you do you”.
What you’re going to learn as you start budgeting is that no one else can budget for you. Following someone else’s money plan won’t make you happy if it doesn’t have your goals and your values as a plan. If you want to spend your money on sparkly unitards and platform boots but cut back on the amount you spend on entertainment, dining out, or even groceries, that’s okay.
There is literally no such thing as a perfect budget. My budget might make you feel deprived in some areas and wasteful in others. Money is an exchange of value, and for you to really rock your budget, you need to actually think about your values. You do you.
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