Extreme Makeover: Budget Edition

Can you think of any financial tool that is more universally disdained than a budget? Just mention the word and people conjure up images of a ball and chain. They talk about it as something one goes on like a diet. “Poor John and Sue; they’re on a budget.”

Budgets even seem to be a favorite punching bag of many personal finance writers. However, the odd thing is that several writers who beat up on budgets go on to teach people what sure looks like budgeting.

In his book, “The Automatic Millionaire,” David Bach tells readers to “take those budgets you’ve been struggling with and throw them in the garbage. If you really want to budget your expenses, that’s your business, but I think it’s a waste of time and effort.” And yet in his “Finish Rich Workbook” he teaches readers to estimate and then track what they spend. He also acknowledges using Quicken to track his own household’s spending.

In the classic money management book “Your Money or Your Life,” Joe Dominguez and Vicki Robin write, “Don’t worry. This program is not about budgeting!” They then proceed to teach readers how to track their spending “down to the penny.” How is this different from budgeting? They explain that their approach is “based on consciousness, fulfillment and choice, not on budgeting or deprivation.” Ah, I’m glad we cleared that up!

A New Perspective

I believe a budget is the single most powerful tool for successful money management. Yes, using a budget takes some work, just like exercise. However, in exchange for a few minutes each day, people who use one report that it gives them a sense of financial freedom, control, and peace of mind. They know where their money is going and can make proactive decisions about their spending so they can achieve goals that are important to them.

Perhaps it’s time that the lowly budget received an extreme makeover. In part, that’s about the words we use in describing budgets. A budget is not about less; it’s not about cutting back, tightening the belt, or reigning yourself in. No one likes any of that. A budget is about more; it’s about having more knowledge about where our money is going, so we can spend more effectively, so we have more money for what matters most.

One sign that budgets are already going through something of a makeover can be seen in the popularity of free online budget tools like Mint.com and moneyStrands. Bringing budgeting online has attracted a whole new generation to the budgeting game. This is the closest budgets have ever come to being thought of as cool.

Mark my words; it won’t be long before we see budgets written into the storylines of popular sit-coms. Celebrity endorsers can’t be far behind. The only question is: who will be the Ty Pennington of Extreme Makeover: Budget Edition?