Don’t Use the “B” Word
How little changes in language lead to big problems–or avoid them
In the 19th century, women did not have legs. I’ll bet you didn’t know that. No, they had “limbs.” For some reason polite society considered the use of “legs” for a woman’s extremities was crude, even risqué. We still use euphemisms to avoid language considered improper or impolite. People of our acquaintance don’t die, rather they “pass away.” Sales people are told that clients prefer the word “investment” to the word “price.” And you don’t sign a contract, you “approve” a contract.
So we often are put off by certain language which can make us unwilling to do certain things, or, at least, not feel good about doing them.
Well, I want to talk about the “B” word. That’s right, let’s just say it out loud: budget.
Every financial guru from Dave Ramsey to your stockbroker talks about having a budget. Shoot, even the federal government has what they call a budget. Problem is, most budgets (like the federal one) are not the protection from foolish spending they are intended to be. Instead we ignore the idea, or don’t even start one up to begin with. Even if we do, we immediately put it aside, never to be looked at or revised again.
That’s not surprising, either. The “B” word has a bad reputation. Things that are cheap are done on a budget. There is no Presidential Suite at a Budget Inn. Budget Rent-a-Car has never worried about being even number two. Everything that relates to a budget relates to restrictions, cut backs, and denial. So the word budget becomes a euphemism for second rate, for scarcity, for poverty.
No wonder we run screaming from the idea of being on a budget. Same kind of reaction when we’re told we need to go on a diet.
But this is an abundant world. There is plenty for everyone. Only our own limited thinking limits us. So we need to change how we think about planning our cash flow. That’s all a budget is–a plan for our cash flow.
We have needs and we have wants and we should have a plan to direct our money to both of those features of our lives. Needs must be met, and wants should be met. As our income stream grows, we direct funds to each of those areas. As the stream grows even larger, the proportion of funds that go to needs decreases, and the wants get a bigger share.
And planning how to make that happen is both challenging and satisfying. By dealing with this as a plan, we have control of it. The “B” word is like a diet–it is imposed from the outside and we don’t have any say so. But a plan lets us look at our income (whatever it is) and decide how much of it can be allocated to what areas.
That allocation is dynamic, not fixed. It is obvious that if you have less money a bigger percentage of income goes to needs–but not all. And review and experience lead to better handling of money, and more funds available for wants. As that develops, allocations change.
The beginning of a good cash flow plan is the absolute commitment to the idea of paying yourself first. That’s the basis of the 401(k) concept for retirement planning. So begin by setting aside a portion of your income for yourself before you do anything else. Put it aside in a separate bank account at a separate bank. Then, on a regular basis, go to that fund and withdraw half and satisfy a want, rather than a need.
I won’t work if you dive into that fund willy-nilly. Hold fast. But it will work if you then plan the best way to allocate the remaining money to your needs. That pay yourself first amount may only be a few per cent, but it is yours and it is real. You can use it without “stealing” from some other area. You’ve already set it aside, it’s waiting for you. Not “pie in the sky, by and by,” but right now, as soon as you start.
If you’ve had trouble making a cash flow plan work in the past, simply do this: The next time you are paid, take 2% of your gross pay and open a savings account at a bank different than the one you regularly use. Put that 2% in there. Then, do the same thing pay day after pay day. Just 2%. At this point, you just want to prove to yourself that you can do it. Observe whether it causes you problems with your every day spending, monthly bill paying or charitable giving. Leave a comment in 90 days and share what you learned in this process.
But whatever you do, don’t use the “B” word.