Budget for Freedom

I’ll lose my freedom if I use a budget.

The first tangible step towards winning with money is to make a plan for every dollar:  you need a budget.  Yet the most common complaint I hear when I suggest this step is for the loss of freedom.

You’ve got it dead wrong: Your budget is freedom.

Freedom

My Captive Life

Before I lived on a budget, I didn’t spend a lot of money and just had a general feeling that I was making more than I was spending.  But my wife was an absolute beast when it came to saving money.  She packed her own lunch for work every day and wouldn’t drop a nickel at a garage sale without careful analysis and consideration.

I didn’t pinch the pennies nearly as hard.  It was my habit to go out to lunch a couple times a month.  I also enjoyed stopping by a local coffee shop for a break from my cubicle most mornings.  At some point, my wife pointed out that she’s saving us a lot of money packing her own lunches and skipping coffee shop visits — why do I get to spend that money instead of her?

How did I respond?
A.  “You’re right, I’m sorry I’ve been squandering our limited savings.”
B.  “Hey, I work hard, I deserve a few breaks!”
C.  Shrug – keep taking the coffee and lunch breaks, but a bit quieter.

I did a bit of all of the above, but I started feeling guilty about these little excursions, and I felt trapped by the situation.  I really liked the little breaks in my work day.  The truth is, I didn’t really have an answer for why I should get to spend those dollars.  There wasn’t a good one.

Discretionary spending was an ongoing conflict.  And we were trapped in a cycle of passive and mutual resentment.

Freedom

And then we started living on a budget.  Each of us got a small percentage (about 2%) of our monthly spending to do whatever we wanted.  Suddenly, I had to decide if my daily coffee was more important than a new pair of soccer shoes.  I went out to eat less, because there was other stuff I wanted more.  I learned this simple truth:

You can have anything you want, but not everything you want.

I had to prioritize, and that caused me to limit my spending without feeling any resentment towards my wife.  Furthermore, I noticed that she now felt more freedom to spend her money and enjoyed doing so.  Each month, any money we don’t spend in our discretionary spending categories is rolled over to the next month.  She almost nearly always has more than me, but I’m doing okay.

Another bit of freedom I hadn’t counted on?  Gifts between us are more meaningful.  It used to be I could take her out for a nice dinner, but we’re paying for it out of a joint checking account.  Now I can take her out for ice cream and take it out of MY CASH.  It truly is a gift where I sacrificed something of my own for her benefit.

Conclusion

We do still have an occasional disagreement about money.  If I take the kids to the zoo is that discretionary spending from my account or an educational investment in a different category?  But in one fell swoop we eliminated 98% of our conflict, resentment, and feelings of guilt around our spending decisions.  And if I want to spend my “fun money” to start a website?  She wishes me good luck!

Do you have a budget?  If so, have you felt more freedom?  If not, why not?  Please share your thoughts in the comments below!

6 Replies to “Budget for Freedom”

  1. Sounds like you got a winner in a wife and that more than anything is a key to financial happiness.

    Very smart idea of setting aside discretionary money so that you can make guilt free purchases and also more meaningful gifts to each other. I will definitely incorporate that when I get married again (going back to my first point of needing a good partner as the first one I had destroyed me financially as well as emotionally)

      1. I can’t remember if you said you viewed the series of posts I made on my blog but there is one post that you should read about my marriage and subsequent divorce (and civil lawsuit she filed against me). It will really make you appreciate what you got

  2. Framing something in a certain way can have a huge impact on outcomes and perception. My wife and I still keep separate accounts becasue she takes pride in a her personal squirrel fund and I like being independent with my investments but the joint account takes care of 98% of our expenses. This has forced us to setup our life style for significantly less than our take home pay. We end up living off 50% of one of our incomes and save/invest the rest.

    1. Yeah, though we don’t keep separate accounts, I think we effectively have the same situation. Our “separate accounts” are the categories in our budget. All the money sits in a digital pile at the bank, but it’s parsed according to our monthly budget rules.

      Thanks for sharing!

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