Spreading Your Budget Too Thin

Is there such a thing as having a budget with too many categories? It sounds funny because many of us DO have extra categories that we would love to be able to fit into our budget. But what if you are able to fit them? I know that in the past that I have often mentioned to be specific and realistic with your list of expenses. If you are spending money on something, it is important that it is included in your budget, or it will be going on the credit card and creating debt. However, there is a difference between a budget and a wish list, and I want to talk about that today.

Recently, a lady was talking to me about how tight her budget is. “I just don’t have much wiggle room,” she complained. But as we continued to talk she revealed that she has categories for everything in her budget: her hair, getting her nails done, her house keeper, Christmas, vacations, birthdays, anniversary, yard work, plus all of her bills. Honestly, her “budget” sounded like my wish list. She had planned for everything thinking that she was being smart with her budget, but had left herself with nothing left over. Now, she has the funds to be able to do that; however, she has also maxed out her budget to the point where she feels like she has no money (yes, I know that may sound crazy to some of you who would die for a manicure or even a vacation, but to others it will make perfect sense… so hang in there.).

The issue here is that she has come to view the optional, fun things that only come from abundance as mandatory for her life. By putting these “extras” into her budget she is giving them a place of importance that she may feel is valid, and yet they really are not essential. Sometimes you can forget that spending that money is optional just because you have it set aside for that purpose.

For instance, instead of looking at her budget as tight with no wiggle room, she might consider adjusting some of these optional things. She could drop her weekly manicure, or iron her own laundry and thereby cut back on her dry cleaning budget, or even reduce her savings for Christmas (and then spend less at Christmas). I feel like I am picking on her, but many times we are all guilty of thinking that a certain thing is just not “optional”. One of my dear friends insisted to me while I was doing her budget that even though she was in debt, “Getting coffee is just not optional.” I laughed with her, because coffee may not be optional, but buying a Starbucks Latte at almost $4 each several times a week is definitely optional.

We all get these blind spots that we think we just can’t live without. However, when those blindspots are sabotaging your budget and causing you to constantly feel like you don’t have enough, then it is time to re-evaluate what is actually important. That $4 Latte three times a week is an additional $50 a month that is coming out of my friend’s budget! That is an extra $600 a year that could be going towards her debt. It is funny because when your perspective changes, everything becomes optional.

Even if your budget is tight and it seems impossible to squeeze in anything else, there still may be areas that you have locked yourself into “having” to have, that are really not neccessities. Another friend of mine insisted that she just had to have money for eating out. “You could save a lot of money by cooking at home,” I suggested. I could tell by the look on her face that no matter what I said she was still going to do what she wanted to do. Eating out for her had become a “neccessity”, yet if she really was as tight as she said she was, then she would have seen eating out for what it is: a luxury. So…. tight, but not that tight 🙂

And that is exactly my point. If you feel like your budget is tight and you are always barely making it then you may need to give yourself some more “wiggle” room at the expense of your luxury categories. I am not even suggesting that you cut them out all together. One Latte a week would still reduce your budgeted amount by $35. Or perhaps, have your home cleaned every other week, or even once a month. How about limiting yourself to only eating out for lunch ~ a time when many restaurants reduce their prices for the lunch menu, you are less inclined to order as much as dinner, and thus your bill will be significantly lower? That way you can still get the flavors you love and free your budget up as well. If you are already paying for a cell phone, you may consider cancelling your home phone number? Most people are using their cell phones more these days, and that extra $25 a month (at least) for a land line, may well be a luxury that you will never even miss.

Along these lines, I have a confession to make: I don’t have a hair budget (or a nail budget for that matter ~ although that would be lovely… and stupid for me… I have three children after all. My nails are constantly destroyed). It is something that I would love to add into my budget, but there just isn’t room at the moment. We have prioritized our budget and really the only place that that money could come from is savings, and I am not willing to do that. So, when I need my hair cut I just have to believe God for the money for my hair.

And you know what? He is wonderful at taking care of me. He knows my needs and is the one who is providing for me, whether through my husband’s work, or my side work, or whatever the source… it all comes from His hands. Every time I need a haircut it is an opportunity for me to believe God and see His faithfulness. You may also need to cut some of your luxury items out of your budget and just start specifically believing God for His provision for those items. Can I encourage you to then wait for His provision and don’t put it on the credit card. It may just be a great lesson in faith and in seeing the faithfulness of God, or His faithfulness may be revealed in you not needing that luxury as much as you thought you did.

It is wonderful to have a budget, but it is also OK to leave things (especially things that are Luxury) out and then IF you need those things you can pull that money from your Gift budget, or Entertainment budget, or even from Clothing money. I am not saying to put it on credit card, or to be foolish about things that you regularly need and that need to be included in your budget. I am just saying that there is such a thing as spreading your budget to thin, and in that thiness it often becomes unlivable. Giving yourself a little bit of wiggle room will often stop that burn out and the spending free fall that often comes after budget burnout and that lands you back in debt.

Instead of labeling your Latte budget as “Latte budget”, how about “Free money”. Sometimes just changing the title may help your heart to relax in what you have to spend and in not feeling so tight. It may seem like “semantics”, but giving yourself permission to spend that money on other things than Latte’s (and then having the boundary to stop spending when the envelope is empty) can really help your heart to keep going with budgeting. It may be a choice like, “Do I want to be able to buy my coffee out next week, or do I want that new book.” You may decide to check it out from the library instead of buying it, or you may decide that you can make coffee at home next week. But in that freedom to choose and to wiggle, you will feel freedom. You are still within your budget, but you aren’t locked into too many itemized categories. Call it all Free Money or Entertainment Money instead and then wiggle away 🙂 Or you may just decide that you don’t need the coffee or the book, and instead you put that money into savings. And that is the whole point.

Your budget is a guide to your financial journey. It should never be prison, so don’t get locked into too many categories that only seem essential. Determine the categories that actually are essential and then put more money into savings. After all, budgeting isn’t just for your wish list of wants today, it is for your dreams for tomorrow. and I promise you that when you are able to put down the cash deposit for your new home, or pay for your children’s tuition to university, or take your dream vacation… you won’t miss the Latte’s at all.