Why Having a Budget and Being On a Budget Aren't The Same Thing
I recently wrote a rambling long post on my Instagram about the term ‘being on a budget’ not being the same as having a budget.
Obviously, I have a budget. I’m all over it, I enjoy it, and it’s helped me turn my money mindset around from being a natural ‘spender’ to someone who is much more careful with my money. It’s actually one of my greatest life achievements – if you couldn’t already tell from the tone of all the stuff I smear across the internet about personal finance.
But despite having flipped 180 on my frankly shit attitude to money, I still wouldn’t call myself frugal, nor would you ever find me clawing through ‘budget travel guides’ or doing something ‘on the cheap’. Because while money mindsets can change, I don’t know if my taste ever will. I hate doing things ‘on a budget’. If it was a case of going on holiday camping or not going at all, I’d rather not go at all.
Yes, that’s an entitled, spoiled, middle class millennial thing to say. But that is who I am.
I’ve always enjoyed what some might call the finer things in life. That’s not to say my daddy bought me a pony and a butler drove me to school – far from it. I come from a very normal background financially – in fact, I was probably of a lower financial class than many of my friends, particularly at uni. But both my parents have always favoured the higher quality option –they’d very rarely do anything by halves. For example, I rarely had to have a cheaper toy or an unbranded alternative to something I wanted. Yes, that was in part because I was an only child, and one Baby Annabelle isn’t much more expensive than 3 unbranded dolls from Asda. But still, you get the picture.
I’ve certainly inherited my parents ‘fuck it, it’s only money’ attitude. And despite that probably leading me financially astray at times, I’m okay with it.
So how do I have a budget, without doing things ‘on a budget’?
It’s simple. I budget for extravagance.
The Instagram essay I referred to before was a story about my visit to the Australian Open. My partner and I go every year, and yes, it’s expensive. The tickets are expensive, the drinks are expensive, and the food is expensive.
I wanted to enjoy all of it without blowing my budget.
Some might suggest bringing in your own sandwiches to avoid paying extortionate food truck prices, or skipping the $12 Aperol spritz in favour of lukewarm tap water from your bag.
But like I said – I’d rather not bother.
The beauty of having a budget is that you can make it whatever the hell you want it to be. So when planning the week of the Australian Open, I budgeted for extravagance. I cut back on other areas in the weeks leading up to the event – like skipping a coffee shop visit, or turning down a takeaway offer in favour of a frozen pizza – to create space within my budget to spend big at the tennis.
I budgeted $50 per evening for food and drink (we had 3 night sessions booked) and $100 for the Saturday day session we’d booked. Then, on top, I had an extra $50 allocated to the event just in case I went over on anything.
Pulling an extra $300 out your arse might sound like an impossibility when looking at your numbers. It would have to me 6 months ago.
But I’ve been creating this $300 gap between my income and my expenses for about 3 months. The longer you plan ahead, the less you feel the impact. Basically, I was squirreling away $50 here and $20 there, whenever I found myself with a little extra available
So while I enjoyed my annual tennis fix within budget, I certainly didn’t do it ‘on a budget’. Looking at me and my Aperol-stained lips, you wouldn’t think I had a care in the world about my budget. But in fact, I care a great deal about my finances, and I’d actually just planned it really, really, really well.
Disconnecting the term ‘budget’ with feelings of deprivation and compromise can have a profound effect on how you approach the idea of spending smart.