Monday, April 13, 2015

Two Simple Reasons Why YOU Should Budget

As I wrote about yesterday, I'm going to be focusing on budgeting for the next several days. Tonight I initially wanted to get into The Foundation, but as I typed, I saw that we actually needed to do a bit of digging first. Here's where we're going:

First Things First: Why Budget?
The "why" questions are perhaps always the most important to answer because, as I've said before and will scream on the rooftops in the future, why questions get at purpose. And purpose leads to action. If we don't see the value in budgeting or have a compelling reason to change our behaviors, none of us will change. It takes too much work and most of us, if we're honest, would rather waste time dreaming about the easy life or settle for instant gratification than work hard and sacrifice now for a better life later. 

Retirement Has Folk Living in Wiggsville!
So what's the compelling reason? Well, I think two stats that are easily found will help. First, a Gallup poll conducted just last year showed that the biggest financial worry American's have is that they won't have enough money for retirement. This concern, which is the consensus among 59% of Americans, has topped all others since 2001, so in times of both prosperity and recession, American's have remained consistent about this worry. Additionally, the age group that this worry affects the most is middle-aged people. For ages 30-49 it was at 70% and 50-64 it was 68%. Basically 7 out of every 10 people in an age group ranging 35 years are say having enough money to retire is their top financial concern. They have all moved into the town of Wiggsville, wigging out together about retirement in a little cul-de-sac somewhere, while the other three travel the world together. Does that strike you as a problem? Are you concerned you financial future? Are you living in Wiggsville with countless others? So what are you doing about it? 

You Probably Ain't Budgeting
Chances are you aren't budgeting, and that's the crazy thing. If I came from the future and told you that had no money and kept hitting me up because I could help, wouldn't you want to change something now? Well, another Gallup poll, conducted in 2013, reports that just less than one-third of all Americans "prepare a detailed written or computerized household budget each month that tracks their income and expenses." The stats reported are pretty even across the board, regardless of political ideology, education, or income, though the the percentage is slightly higher for those with more education and an income over $75,000. Yet still, it is the inverted percentage of those who worry about retirement. 

This is sheer speculation, but could it be that the majority of people who are freaking out about retirement also do not budget? In other words, most people who are super concerned about the future are doing nothing about it in the present. Again, is this you? 

Young, Single, Naive -- You?
Perhaps you're reading this and you're saying, "Well, Andrew, I've got you because I don't really budget, but I'm also not worried about retirement. What say ye?" I say, you're either really young, really single, or really naive -- probably some combo of those. I spent a good bit of time working through budgeting with some young folk who had just graduated college, so I understand how that feeling can be strong. I see the same thing in late 20-something, early 30-something single folk who have more purchasing power through more established jobs, but are all over the place with how they spend. And, sadly, I know all too well the deep financial challenges retirement-age individuals who didn't use those earlier years now face.

The math is pretty basic: each day that comes you are either alive or you aren't and each day that comes in which you are alive you either have the finances to support yourself or you don't. And as you get older, it tends to get more complicated with spouses, children, a house, a car, school, clothes, etc. If you don't get ahead of it now, regardless of your income, you are missing out on some of the best years to establish good principles and practices and also make some of the best contributions toward your financial future. 

Let this all sink in a bit. You probably aren't prepared for retirement, are living in Wiggsville, and see now way real way out. Is this "why" compelling enough for you to start making some changes? If so, we can get started tomorrow. If not, don't say I didn't warn you and the future you best not hit me up for dough later.

This blog is an idea. An experiment. An adventure. I am writing a post on one thought for 30 minutes everyday for a full year. If you like what I write, have an idea for me to write about, or have any feedback, please share in the comments below. Also, if you think it is at all valuable to you, share it because it just might be the same for someone else. Boom!

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