Budgeting is boring. And most budgets do not stand the test of time, so why is budgeting important? Why should you budget when it limits your freedom without obvious benefits? And what is a budget for God’s sake?
I am not the one for famous quotes, but ‘You are the CEO of your Life’ did stick with me. We can no longer attribute it to a single person, simply because its meaning has evolved into different things for different people… I like thinking that all those different people would agree on one interpretation: CEOs have vision and control of their businesses, just as we should have vision and control over our own lives. What relationship does it have to the importance of a budget? Very direct, I must say.
In my not so humble opinion, great CEOs value two things: dreams and discipline. Or, in boring business lingo: vision and planning. They dream big by creating a mental image of their company, their product, team and their role as CEO. And they are disciplined enough to convert that image into tiny little steps and constraints defining how the dream becomes the reality. Since CEOs rarely dream of money-less businesses, steps often direct where money should go and constraints – how much money are they willing to spend. Sounds familiar? You are right, sounds like CEOs might be budget nerds! Well, at least some of them are.
In other words, the question ‘why is budgeting important’ should come down to ‘why is it important to be the CEO of your life’. Importance of a budget correlates with the strength of your desire to dream and have your dreams materialise into reality.
I find dreaming as important and enjoyable as a great night of sleep, just as refreshing and always starts a new day for me. And if I want my dreams to become something more I need to recognize the gap with reality, carefully consider what is truly important and how to get there given this reality. Now let’s get to answers for our boring questions:
- Budget is a detailed spending plan for your dream life based on the reality of your situation today.
- Budget is important because it helps increasing probability of getting from A (=today) to B (=dream world)
- YOU should budget, because no one else can do it for you. And even if they could, their chances are they would prioritize different things from you and the destination (B) will be very different from what you dreamed about.
If we are all settled on the importance of a budget, you needs to start now:
- Think of your dream
- Define what is absolutely necessary today (= constraints)
- Start with our free template or with Monshare budgeting functionality.
If you already use Monshare for expense tracking, enabling budgeting is a matter of a couple of clicks. You can define budgets for your big projects or regular monthly expenses. Here is an example of how budget based on infamous 50/30/20 rule can look like in Monshare:
You can enable and disable budgeting functionality in the Pot Settings screen whenever you choose too. Remember that these settings are also shared with your partner, so you might want to align on the importance of a budget with them as well.
We would love to hear your thoughts on whether budgeting is important for you and how you manage it.
And if you are looking for advice on how to enjoy your travel during COVID, have a look at our latest blog post here.