Budgeting is an important first step for financial success. Your clients are likely to agree a budget is important, but getting your clients to commit to budgeting is another story. Budgeting creates awareness, and that awareness develops a basis to make informed, responsive decisions rather than continue down a path of passivity when it comes to spending.
Carl Richard’s post on NY Times Bucks blog “Why Budgeting Will Lead to More Awareness” highlights the importance of budgeting. I especially appreciated this comparison – “Budgeting and flossing: Both insanely important, super simple, and for many of us, nonstarters.” Mr. Richard’s post includes three reasons why people don’t budget, shared below.
1. “It’s not fun.”
Okay so it’s not fun, but remind your clients that it’s not hard and the results are totally worthwhile.
2. “I already know where my money is going.”
Your clients might have an idea where chunks of their money are going, like for mortgage payments and phone bills, but it is very unlikely that your clients have a complete, accurate picture of their spending unless they go through the process of tracking their spending and evaluating the results. If your client already knows where they money is going, challenge them to create a budget based on their knowledge, and then have them commit to tracking their spending for 30 days and see how the actual results compare.
3. “I’m not sure I want to know.”
It’s likely that clients are comfortable with their spending and probably know tracking their spending will shed light on areas they would rather keep in the dark. If you don’t “know” you spend $150 a month at the coffee shop across from the office then it’s not really a problem, and so it’s not something you need to change. People don’t want to dive into how much their daily decisions are really costing them. People like the freedom of spending what they will and buying what they want. Tell your clients budgeting isn’t to drag their lifestyle down, but build it up by making sure their spending is reflective of what they truly value in their life.
