We’ve all heard the saying that money is the root of all evil, but specifically, it can be the cause of stress and anxiety. However, if you look at it, money is neutral. It is a tool that we can wield to do good or bad things. Therefore, how you feel about money can easily be traced back to your money management style and the way you budget.
There are those who are under great stress because they cannot stop themselves from overspending. But in this article, we will take a look at the other side of the money management spectrum: The master budgeters who may have tightened the strings on the money purse way too much. If you think this is you, then you may have encountered the following thoughts: Am I sacrificing my happiness for the sake of sticking to a strict budget? Am I supposed to spend on things that will make me happy now? Why do I even have a tight budget?
These doubts usually surface when confronted with a decision to either spend on something that you want but don’t necessarily need or save because your budget says so. Let’s say that your friends invite you to one of your favorite artist’s concert at the last minute. You didn’t make room in your budget for events like this, but you also want to go. What do you do? Will you splurge a little or will you decline and then doubt your decision days after the concert has ended? If you are the latter (and you have no outstanding debt, and all your bills are covered), then it looks like your budget does affect your happiness. While stringent budgeting measures are applauded in certain situations, you are also allowed to spend a little and enjoy life.
The philosophy of creating a budget
The philosophy behind budgeting aims to help anyone spend their money intentionally. However, it’s also all too easy to take budgeting to the extremes and make spartan living a way of life.
Creating a budget is a means to avoid overspending by directing or deciding where your hard-earned cash should go. At the beginning of each month, you take your total income and determine how much money goes to specific categories, such as groceries, rent, food, and so on. For a budget to be successful, you have to follow it, which means saying “no” to that third dinner invitation with friends for the week, for example, or making sure that you use up everything in the refrigerator before going out for groceries again at Whole Foods.
The best thing about creating a budget is that you can achieve certain life goals such as buying your first car, a house, or going on that long trip within a specific time frame. And hitting those goals can be addictive.
When to loosen the strings
But if you’re in a good place financially, you can afford to loosen the strings a bit. When you’re not in any credit card debt, and all your bills are covered, indulge a bit and enjoy what your money can buy you.
Here are a few things you can do to determine whether you should hold off on a purchase or not:
- It’s something that you have dreamed of for a long time. If you have a bucket list, and this thing is most likely on it, then get it.
- Ask yourself this question: “If I died tomorrow, would I regret not getting it?” If your answer is yes, then, by all means, go for it! More often than not, these occasions include spending time with family or friends, and it usually entails purchasing an experience, such as a trip or a special event.
- If you’ve got your eyes on a piece of clothing, ask yourself if you’re going to wear it at least more than five times. Familiarize yourself with the principle of cost-per-wear, which means getting the most out of something, tremendously reducing its daily cost.
These questions are effective in uncovering the things that matter the most to you. But also remember not to lose sight of your financial standing, this way, a single event won’t be your financial downfall.