Originally Posted By: OurHouse
I wonder how people really are able to be so disciplined to stick to a budget. I know what I did is a far cry from Mrs. Hold but the smaller things add up and I wonder if I too contributed to our financial state of affairs.


OH, most people don't understand budgeting. We have what I view as a severe lack of fiscal conservatism in this country. After all, some 70+ percent of our GDP is derived from our spending habits (problem).

Most folks associate a budget with the negative connotation of limits, or as you said, discipline. Does budgeting require discipline? Yes and no. Yes in that any plan requires a willingness to stick to the fundamentals of the plan. That said, any well designed budget accounts for both wants and needs - it recognizes that we all have real needs, as GBH said, but we all also have wants - and any budget should reflect both realities. A budget that overstates needs and understates wants will never work long term (though budgets can be altered temporarily to reach certain goals). I've read a TON of financial planning books, mostly because one of my hobbies is the study of economics and finance (my major in college was Securities Analysis/Finance within the Business Admin track). I own precious few of these books as most I don't feel do a good enough job to warrant owning. I can recommend a few books if you're interested. One of the best overall books for budgeting is All Your Worth here:

http://www.amazon.com/All-Your-Worth-Ultimate-Lifetime/dp/0743269888/ref=pd_sim_b_1

The key concept is that every budget has to reflect our being human, and therefore every budget has to have a healthy balance of wants and needs. For instance, if too much of the monthly budget is going toward real needs, then the family members will inevitably feel as though they are missing out on certain aspects of life (wants such as vacations, eating out, toys, games, or whatever else the family in question views as their wants/luxuries). The book I've recommended doesn't just talk about budgeting, it also talks about the human component, and how to achieve a good balance of wants and needs financially.

Ever wonder why one family that makes 75k a year seems to live well and really enjoy life while the family that lives right next door and makes 150k a year always seems to be struggling? It's all about balance. High level, All Your Worth will teach you a model that breaks down as follows: 50% needs, 30% wants, 20% savings. I won't say any more than that as what goes into those categories is what the entire book is all about. Can't recommend it highly enough for those struggling with their finances due to being out of balance.

Last edited by HitchHiker; 12/21/09 01:32 PM.

God Bless,

HitchHiker

All I want to do is learn to think like God thinks. , I want to know Gods thoughts; all the rest are just details. , When the solution is simple, God is answering. - Albert Einstein

INTJ married to an ENFJ