Being fiscally responsible and living on a budget is an education! The first time I sat down to read a book or listen to a lesson, it was confusing. There were all these terms to learn, only some of which I was familiar with, and most I had heard of but wasn’t fully aware of their importance: interest rates, pre-tax versus post-tax, APR, compounding, etc. It requires a whole new vocabulary. Once we have those under our belts and understand how to create and use a budget, there are many things to be learned that are completely unrelated to your finances themselves; intangible lessons that are just as valuable.
For example, living on a tight budget requires self-discipline. A lot of it. Because that money sitting in your bank account? If you have a good budget that money has already been spent. It belongs to the grocer or the credit card company or the landlord. Just because you haven’t written the check yet doesn’t mean it’s free money. But when it’s sitting there in your account looking so tempting as you think “I could buy a new purse with that!” it takes a lot of willpower and discipline to remember that you CAN’T use it for that new purse or the hot pair of shoes you saw yesterday.
What about the ability to say no? We have to say no to ourselves, which can sometimes be even harder than saying no to other people. Personally, I find it more difficult to say no to others. So what happens when your entertainment budget for the month has been maxed out, but there’s still a week to go in the month and your friends are inviting you out? Exercise for your ability to say no, that’s what. Ideally anyway; we’ve all mentally rearranged expenses in our head so we didn’t have to say no. But there isn’t always wiggle room in the budget for that, so we get to practice saying no.
The great thing about these skills is that they are transferrable! We can use them at work, at home, at the gym (that requires a LOT of discipline, at least for me!).
What have you learned from living on a budget?