Is creating a budget really that confusing?

[katmatry]

Income - expenses
Your income must be a higher number.
If your expenses are higher than you are living above your means and you must either earn more or cut your expenses.

I've always budgeted, I haven't always liked the means I needed to live within but I stuck to my budget.
So I understand people wishing their income was higher to meet their expenses. What I don't understand are people who just don't understand the concept of living within your means.

Is it just me?????

 

[FCDub]

People can live however they want. I wouldn't spend my time worrying about what other people are doing.

 

[siren0119]

I don't think it's that creating a budget is confusing, per se. But it CAN be overwhelming, which is why many don't take the first step to create one. And without it, there isn't a general awareness of what "living with in your means" actually means. Lots of folks skate by on only knowing what their big expenses are each month, never really grasping all the smaller ones that add up and eat away at income. But those are the ones that bite you in the butt.

 

[kymom99]

Some people also just don’t have the logical thought process that others do. Their eyes glaze over when you try to explain anything related to numbers. For example I have a friend who would say, no matter how many times I explained, that money at our school should be spent on x instead of y. I understand that certain money must be spent on certain categories. She just can’t grasp that. I quit explaining it. If her husband didn’t make a boatload of money she would be in a lot of trouble financially. She spends without any thought.

 

[Luv Bunnies]

Yeah. I feel it's really important to have money in savings. You never know when you might need it, and for what purpose. Some people either don't subscribe to that philosophy or don't understand it's importance.

I remember working with a woman once who spent money like crazy. She was constantly shopping for clothes and loved eating out, seeing concerts, etc. Once she told me, "I can have whatever I want for only $50 a month," referring to the minimum payment on her credit card. She never bothered looking at the balance or how much interest she was paying. She just kept on spending.

 

[barkley]

What I don't understand are people who just don't understand the concept of living within your means.

realistically i think unless someone is taught the concept they are at a disadvantage when first faced with it. i look at allot of the roommates/classmates dd went to college with whose parents paid for every expense. that's fine if the parent wants to do it but if they didn't share with their kids how much the rent, utilities, phone, internet, tv, insurance...costs were on a monthly basis and just basically gave them a flat amount to spend as they wanted/needed for groceries and such it can come as a HUGE shock that even if they don't end up with student loan debt they can't begin to afford post graduation the lifestyle they are used to. with few exceptions the ones in this situation who worked p/t for extra money weren't exactly socking it away for an emergency fund or savings-it was their 'fun money' that they used for what they truly perceive as a normal part of everyone's BASIC lifestyle-vacations and entertainment. even the kids who were getting financial aid and scholarships basically had the school doing their 'budgeting' for them-breaking their funds into quarterly or semester installments so the money lasted the entire academic year-academic being the key word b/c dd had plenty of friends who were always scrambling to make ends meet over the summer b/c they overspent during the school year and that was a loooooooong wait between the spring and fall quarter disbursements.

no longer teaching basic budgeting let alone the pitfalls of credit and loans is to my mind one of the biggest mistakes of our current education system (i remember in the 60's we started learning this stuff in elementary school with entire units in jr/sr high).

Lots of folks skate by on only knowing what their big expenses are each month, never really grasping all the smaller ones that add up and eat away at income. But those are the ones that bite you in the butt.

i think this is a big factor with quite a few households. so many people will do a 'budget' and one of the line items is credit card bills but w/few exceptions (an unexpected large expense/repair, a planned large purchase or vacation...) they would be hard pressed to detail out how they amassed that credit card debt let alone how many months worth of what they normally budget into a category they overspend on regularly by virtue of regularly putting them on those credit cards fully figuring they will pay 'that part' of the bill the next month but they don't so they keep overspending in that category month after month after month and totally sabotaging their budget.

 

[siren0119]

Some people either don't subscribe to that philosophy or don't understand it's importance.

Or they simply don't have the means to put anything into savings. We went through a spell where our budget was so tight it squealed. There was no frivolous/extraneous spending (like, no cable no internet one cell phone shared between us because it was cheaper than a landline), but literally nothing leftover after needs were taken care of. Now we're lucky to have the ability to save/have an emergency fund, but there are absolutely folks who financially balance on the head of a pin and aren't able to - and not because they're being irresponsible with what they have.

 

[FCDub]

What I don't understand is people who care about how others spend their money.

 

[Alesia]

What I don't understand is people who care about how others spend their money.

I wish I could like this 1000x!

 

[_19disnA]

If you constantly max out your credit cards and only pay the monthly min............you are NOT living within your means. However, as others have stated, I really don't care what others choose to do and/or why they are living beyond their means....not my business or concern. Budgeting is not that complicated and basically starts with knowing your monthly income and regular expenses. Anyone with basic math skills can do that.

 

[LilyWDW]

My parents did not live within their means so I was never taught HOW to budget or HOW to find ways to save money or HOW to handle bills on a strict budget. Growing up, we never made a grocery list or cut coupons or went without whatever we wanted. That is TOTALLY different now. When my mom got sick and I had to take over everything (my parents were divorced at that point) I was shocked. Then she died and I was on my own. I had to learn fast! At one point I was working 4 part time jobs to try and make ends meet... and still had to ask for help. Now I can pay all my bills, put money in savings, and have a little extra, but things are still tight. Luckily I have a bit of extra money in savings that will allow me to pay off one debt 100% so I can then put some of that extra towards another debt... and I will still have enough in my savings if there is an emergency or if my job were to go poof.

It CAN be complicated and very very overwhelming. Judging others who struggle with it is just sad...

 

[katmatry]

Or they simply don't have the means to put anything into savings. We went through a spell where our budget was so tight it squealed. There was no frivolous/extraneous spending (like, no cable no internet one cell phone shared between us because it was cheaper than a landline), but literally nothing leftover after needs were taken care of. Now we're lucky to have the ability to save/have an emergency fund, but there are absolutely folks who financially balance on the head of a pin and aren't able to - and not because they're being irresponsible with what they have.

I'm not even talking about savings, I'm talking about people who put groceries on a credit card because they have to put the cable and cell phone bill. I'm sorry but maybe living within your means doesn't include cable

 

[katmatry]

What I don't understand is people who care about how others spend their money.

We'll sometimes those people are family members, such as parents or inlaws and unfortunately it affects your life. Bad financial decision lead to a life lived on social security and an extremely small and depleting saving account. The human in me will not allow them to loose the roof over their head or allow them to go hungry. It's frustrating, period.

 

[tzolkin]

We'll sometimes those people are family members, such as parents or inlaws and unfortunately it affects your life. Bad financial decision lead to a life lived on social security and an extremely small and depleting saving account. The human in me will not allow them to loose the roof over their head or allow them to go hungry. It's frustrating, period.

Very true.

My grandparents have always lived beyond their means in a “keeping up with the Joneses” mentality. My parents have had to help them attempt to keep their finances under control since I was an infant. And for the last 20 years they have lived with my parents taking care of them. Their poor financial management will ultimately affect at least three generations because my parents have been unable to save enough for their own retirement since they have had the added expenses of my grandparents so I will likely have to help them out as well.

My kids (oldest is 20) have seen the effect of this first hand and are extremely appreciative that DH and I are very frugal and put a priority on saving enough so they will never be put in that position.

 

[Nebraska_Disney]

I may be cold, but I will take care of my immediate family and that is it. No help to parents. No help to siblings. No help to anyone else who asks. I don’t feel any sense of responsibility towards those who refuse to live within their own means nor do I have any say in their money decisions, again leading me to feel no sense of needing to take care of anyone.

 

[kymom99]

My SIL borrowed $1500 from us a number of years ago. She said she would pay it back but I told my H we would not expect it otherwise we would end up mad at her. Well she paid us $100. She does not live frivolously, but it does irk me that she has a timeshare from back when her life was better, and she goes there every fall for vacation. My thinking is that she could offer us the timeshare for a vacation. But she won't give that up. She is a very kind person but we will not lend her money again. She has a step grandson that she raised. He is mid 20s and cant keep a job. He is dragging her down but she allows it. That doesn't make it our problem. Oh and when my son graduated from high school she came to the party and said she would have to give him his gift later because her grandson was supposed to pick up a card for her but he forgot. That was over a year ago and she has never given him a gift. I know the truth was that she didn't have the money to give him.

 

[Jason_V]

I went through a time about 15 years ago when I had a full time job which barely covered the basic expenses. Before that, I was doing fine with a roommate...but he left and I got stuck with a pretty big rent payment every month. That's when I clued myself into budgets and being careful with money. I would listen to Dave Ramsey and Suze Orman every chance I got and balanced my budget down to the penny. I cut things like all TV service (completely gone) and kept my heat on a very chilly 60 degrees (in Michigan). My food budget every two weeks was $40. I had to mind my money and not stick my head in the sand OR give up.

Slowly but surely, I got into the swing of how to budget and why it was so important. I carried the budget through when I got out of that rent payment and into today. I make a whole lot more now and pay all my bills/save the way I want to...but I still budget every single paycheck. I also mind the money I am spending; if I notice the heat is kicking on more than I think it should, I check the thermostat. I don't have any TV service. I coupon and use cash back apps when I shop. I don't spend frivolously.

It's not rocket science, but a lot of people don't have the stomach for the amount of sacrifice needed to win at money. My ex is that way. He makes a great income but is constantly scratching for money because of stupid money decisions. He wouldn't listen to me or even try to understand how to do better and that's one of the major reasons we're not together anymore. I am a journalism major and I am terrible at math. But I can work Excel pretty decently and track expenses. That's really all you need: the desire, patience and the ability to prioritize. Do I judge people? Not at all. Do I think we, as a species, get freaked out over something and don't take any action on it because of fear? Yes. Do I think that's what's going on, in part, with money? Absolutely.

 

[FQLover]

Great post, @Jason_V. Concise, practical, streamlined and really honing in on fear as one of the main ingredients that people struggle with things like money management (among other tough things, too).

I have offered to help one of my sisters make a budget and lower her debt, try for some savings, etc. many times, but her eyes fill with tears and she shakes her head at me, sort of unable to talk about it. It makes me sad because I really want to help. She is a lovely person who is generous with her time, love and attention to both family and her big circle of close friends. But money and the stress it brings and the emotional impact of it (for her) is just a subject that just kind of paralyzes her. She does put her head in the sand, but tears are never far from the surface concerning that arena of her life.

As a few posters up thread have alluded to, judging others is not only unkind but it does no good. Everyone is not dealing with the same opportunities, challenges, mindsets, or emotional baggage. For those of us who desire to help those close to us, all we can do is occasionally offer to look things over or assist in budgets or decision-making and then gracefully back off if that help is declined. I will also try to model occasionally some of my budgeting decisions in a low key, under the radar way in case she picks up on any of that and would want to embrace it for herself. BTW, my sister never asks for money from any of us, so this is just me noticing how pinched and stressful her life is on this front. I care about her and want her to be less afraid so that she could be happier. She does not live high on the hog at all, either. But fear and a feeling that nothing in her financial situation is fixable has just caused her to shut down on this.

 

[piccolopat]

What I don't understand is people who care about how others spend their money.

You may think that what other people do with their money doesn't impact others but it does. When people overextend themselves and have to declare bankruptcy, the losses that companies incur when they aren't paid back what they are owed gets passed on to responsible customers via higher interest rates, fees and other costs. When banks started to give mortgages to just about anyone with little or no real underwriting, the demand drove prices up and people were buying well above their real means just because financing could be had. When people saw their adjustable rate mortgages reset and payments were much higher they began to default. This led to the housing collapse. Lots of responsible people lost a lot of equity because of it and lots of neighborhoods still suffer from the plague of zombie properties. Yes, banks should never have given out those loans but people should have understood what they were signing up for. I still remember watching shows on HGTV where people had no money saved for a down payment, expected the seller to cover all closing costs and knew they would be unable to replace that aging hot water heater but still wanted to buy a house.

Now we're seeing the curse of student loans all because some people don't consider the time and how much it will cost them to pay the loans back when they choose a school or a field of study. People will graduate without the ability to pay off their loans and suffer the consequences for many years. This will impact their ability to afford to buy homes, cars, raise children, etc. and that in turn will be a drag on the economy.

So, while I don't care what specific things people spend their money on, I do care when large numbers of people live beyond their means and don't save for the proverbial rainy day which inevitably comes for most of us.

 

[piccolopat]

My SIL borrowed $1500 from us a number of years ago. She said she would pay it back but I told my H we would not expect it otherwise we would end up mad at her. Well she paid us $100. She does not live frivolously, but it does irk me that she has a timeshare from back when her life was better, and she goes there every fall for vacation. My thinking is that she could offer us the timeshare for a vacation. But she won't give that up. She is a very kind person but we will not lend her money again. She has a step grandson that she raised. He is mid 20s and cant keep a job. He is dragging her down but she allows it. That doesn't make it our problem. Oh and when my son graduated from high school she came to the party and said she would have to give him his gift later because her grandson was supposed to pick up a card for her but he forgot. That was over a year ago and she has never given him a gift. I know the truth was that she didn't have the money to give him.

Have you considered asking her outright to let you use the timeshare in exchange for what she still owes you?