kittyrong (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} kittyrong) wrote,@ 2009-01-12 15:54:00 |
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The emotional uses of a budget
Undoubtedly, having a budget for expenditures is a financially sound move. Not only does it ensure that one would not spend beyond one's means, it also encourage a responsible, research-based approach to spending. This is a well-known fact and I can have nothing more to add to the subject. However, the emotional uses of a budget is less talked about and is as important, if not more, than its practice uses.
From a psychological point of view, spending is often not as simple as keeping within pre-determined limits. We spend for a wide variety of reasons ranging from need, vanity, pride, compensation, to plain habit. While it may be helpful to be aware of the reasons we shop (and buy), I argue that it is more important to just do the right thing and use a budget. A lot of people (like my former self) would rationalize that they do not need to go through the extra trouble of creating a budget and keeping to it because they spend only when they need to or whatever other valid reasons they have. While these rationalizations may have been founded in truths, here are some emotional functions of a budget that may have been missed:
(1) A budget erases guilt of spending and discourage overly misery behavior:
For someone who is the opposite of a shopaholic and spends only when it is *absolutely* necessary, making a purchase may be associated with guilty feelings. This may have started off as a functional emotion, as well as an unofficial form of budgeting, in that every time over-the-top spending occurs, a reasonable amount of guilt is experienced.
However, it is not strange to then have that guilty emotion escalate into the realm of dysfunction. For example, a well-restrained shopper may become an indecisive shopper who takes way too long to make a shopping choice, or he/she may even develop into a neurotic miser who feels that he/she did something wrong/bad simply by making a purchase (any purchase!). Having a budget would force anyone on such dysfunctional paths of escalation to reflect on their true purchase needs and a reasonable range for expenditure. In sum, this will be helpful in eliminating any sense of guilt in the moment of purchase or after.
(2) A budget reduces long stressful moments of deliberation by defining needs, priorities, and a "want" buffer. It saves time and reduces stress in the long run.
(3) A budget creates confidence in your monetary management skills, respect for yourself from yourself and others, as well as a sense of responsibility that adds to your character.
Undoubtedly, having a budget for expenditures is a financially sound move. Not only does it ensure that one would not spend beyond one's means, it also encourage a responsible, research-based approach to spending. This is a well-known fact and I can have nothing more to add to the subject. However, the emotional uses of a budget is less talked about and is as important, if not more, than its practice uses.
From a psychological point of view, spending is often not as simple as keeping within pre-determined limits. We spend for a wide variety of reasons ranging from need, vanity, pride, compensation, to plain habit. While it may be helpful to be aware of the reasons we shop (and buy), I argue that it is more important to just do the right thing and use a budget. A lot of people (like my former self) would rationalize that they do not need to go through the extra trouble of creating a budget and keeping to it because they spend only when they need to or whatever other valid reasons they have. While these rationalizations may have been founded in truths, here are some emotional functions of a budget that may have been missed:
(1) A budget erases guilt of spending and discourage overly misery behavior:
For someone who is the opposite of a shopaholic and spends only when it is *absolutely* necessary, making a purchase may be associated with guilty feelings. This may have started off as a functional emotion, as well as an unofficial form of budgeting, in that every time over-the-top spending occurs, a reasonable amount of guilt is experienced.
However, it is not strange to then have that guilty emotion escalate into the realm of dysfunction. For example, a well-restrained shopper may become an indecisive shopper who takes way too long to make a shopping choice, or he/she may even develop into a neurotic miser who feels that he/she did something wrong/bad simply by making a purchase (any purchase!). Having a budget would force anyone on such dysfunctional paths of escalation to reflect on their true purchase needs and a reasonable range for expenditure. In sum, this will be helpful in eliminating any sense of guilt in the moment of purchase or after.
(2) A budget reduces long stressful moments of deliberation by defining needs, priorities, and a "want" buffer. It saves time and reduces stress in the long run.
(3) A budget creates confidence in your monetary management skills, respect for yourself from yourself and others, as well as a sense of responsibility that adds to your character.
