Budgeting: Nothing Humbling About It
My husband is a very smart man and he takes very good care of me and Mini. When we were engaged, we decided to merge our finances and had to hammer out a family budget. At first, my husband was extremely resistant to this idea, because he had always associated the word “budget” with deprivation, or with having less, having to scrimp and save just to get by. I think this is a common misconception, since at some point somebody started using the word “budget” to denote “cheap” and, by association, not as good. What I explained to him then, and what I maintain to this day, is that everyone, from every tax bracket, in every circumstance, needs a budget. The reason for this is that people tend to spend what they can, to the limit, when they don’t tell their money what to do and where to go. And it’s as true if you’re living in the Hamptons as it is if you’re living in South Central Los Angeles: the price tags change, but the portion of income going out the window doesn’t. Just ask all those people who worked in the finance business in New York–they were making millions of dollars a year and now have little to show for it, ultimately finding themselves in the same situation as people who have never made more than $50,000 a year.
There’s no question that a big salary can make your life easier, but the advantages of making money are lessened when you don’t pay attention to where your money is going. I was recently reading a non-financial blog and came across an interesting comment in response to a claim by the blogger that she was going to try to save money. The reader claimed that they didn’t like personal finance blogs because they talk about cutting back and “budgeting,” and that they wanted to hear from someone who allowed them to have some fun. This was the gist of what the commenter wrote, but the line that stuck out in my mind was this one: “It is humbling to look at grocery store prices.” And it’s this comment that inspired this post.
There’s something entitled about a comment like this one, but it’s not that element that I find most interesting as a personal finance blogger. What disturbs me about it is that it betrays that same attitude that once you get past a certain level of income, you will not have to budget (or look at price tags ever again). And this is just simply not true. Furthermore, it makes it seem as if there is something embarrassing or improper about being smart with money, and this is also not true. When did conserving money become declassé? What about all those WASPy old-money New Englanders with their threadbare carpets and trust funds? When did status become attached to irresponsibility and huge credit limits?