Most people see "budget" and they think of saving money and spending less. However, I believe that budgeting gives you permission to spend money in a way that feels aligned and purposeful. So today, I'm going to show you how our personal budget helped us spend MORE money over the years.
Note: This is not a brag post. I want to show you through my personal testimony that budgeting works. Your situation might not look the same as my situation, and that’s okay. But I believe there are takeaways from my story that can help with any financial journey!
Why I Started Budgeting
My wake-up call was when I spent a summer working a miserable summer camp job, only to reach the end of summer and realize I had nothing to show for it.
As my pessimistic brain does, I jumped to extremes for the future and I imagined myself graduating college and trying to get married to my college sweetheart… with no money.
I started learning how to budget so that I could know the money I was earning was no longer going to waste. My then boyfriend and I each set personal savings goals for how much we wanted to save by graduation so that we would have a solid foundation to start a lives together.
I learned a lot in those years. Every time I tried budgeting by saving every spare penny and limiting my spending as much as possible, I would blow my budget. I’d typically get frustrated with having to “act broke” all the time and, in moments of emotional weakness, would justify that I had been doing good recently and could justify a purchase or two…or three…or four… It never ended well.
But when I finally learned to budget with breathing room and by building in fun and other values, my bank balance grew. I was still spending money on the things I wanted to spend money on, but I still reached my savings goal. It was a weird kind of math.
Since then, Michael and I (now married) have used budgeting to be able to save for AND spend money on many different things in our lives.
What We’ve Spent Money On
Budgeting results in weird math.
Simple math would say that if you earned $4k this month, you shouldn’t be able to write a $10k check. But that’s not how finances work, is it?
Budgeting means that you’re able to build up funds over time so that your earnings and savings build upon themselves. It’s not as simple as “what did I earn vs. spend this month,” it’s about “what is the cumulative impact of how I’ve managed my money over time?”
Despite our fluctuating (and sometimes quite low) income over the last couple of years, our budget has allowed us to:
Have a $10k day job escape fund for me to get out of the accounting job that drained me
Put $3k into our car on short notice to keep it running safely while we save up to buy our next car in cash
Have the $1.3k we’ve needed for various unforeseen medical needs
Reserve $6k for vacation and travel to celebrate our anniversary, attend weddings for our loved ones, etc.
Put down a $45k down payment to build our first home and spend another $20k on various moving costs, furnishing, landscaping, etc. (Home ownership is expensive)
And of course, maintain our standard bills and expenses in the meantime! (Though our choice to live with my family helped us to accelerate our financial goals.)
When I look at those numbers, even though I know how we did it, I’m still in shock. It doesn’t sound possible. If you had told me at the start of our journey that we would need to reserve this much money (and more for everything not listed!), I would have told you there was no way. As a friend of mine says, “the math doesn’t math.”
But it does. Let’s talk about why.
How The Budget Worked
The list of both financial accomplishments and financial upsets above are not a metric for success to compare yourself to. In fact, I’m sure many of you could do so much more!
So focus less on the numbers themselves and more on this key takeaway: This list shows you what we COULD do BECAUSE we had a budget. I believe it was possible because of these five factors:
#1: We didn’t stop living our lives.
As I mentioned previously, budgets need to have breathing room in them. They can’t JUST be about bills and your one big scary savings or debt payoff goal. You have a life to live in the meantime.
Yes, you want to be intentional and disciplined about it. But also, yes, you are allowed to still eat out and spend time with your friends and buy yourself something nice when the time is right.
No more “fad diet” style budgeting. Budget for longevity and sustainability by making a plan for your REAL life, not an unattainable ideal.
#2: We always knew where the money needed to go.
Because we had a clear system, we always knew where the money needed to go and were able to plan properly for every leftover and every windfall. This meant that the extra money we did have always had the power to bring us closer to our goals (if that’s how we CHOSE to use it, more on that in the next point).
Knowing that we had this kind of a system helped us to remain patient and chip away at our bigger goals slowly, over time, in digestible pieces.
#3: We could make more informed decisions.
Because we knew clearly what our goal was, we could tangibly see when we were taking away from that goal. Sometimes we decided it was worth it, sometimes that would help us make a hard decision to let go of something else in favor of the bigger priority.
#4: We had stronger communication as a team.
Having a written system that we both could see (we use the YNAB app!) kept us on the same page about our financial situation and goals. If you share financial responsibility with someone, this is KEY to avoiding those infamous money arguments.
As a side budgeting tip here, creating individual fun money allowances was probably the best thing Michael and I could have done for our marriage. With each paycheck either of us generates, we both get a set dollar amount into our allowance. What we choose to spend that money on is completely up to us, the other person doesn’t get to criticize as long as it stays within budget. #MarriageSaver
#5: We could focus our energy on making money.
Knowing that our money was being managed well helped us to focus our energy on making money. Don’t underestimate how impactful this is!
We weren’t worried about our money, so our focus was almost always on excelling in our careers, pursuing side opportunities for additional money, etc. I wholeheartedly believe that this kept us open and ready for income-generating opportunities that we would have missed otherwise.
Or, if we had earned extra money, not having a system would make it likely that I relive my college summer camp job mistake of wondering where the heck it went after I spent it on something stupid.
The Takeaway
How have you been viewing your budget?
Is it a “necessary evil,” forcing you to fit your finances into a certain mold by restricting your spending and guilting you into saving every last penny you can spare?
Or is it a plan that allows you to operate with intention and freedom, giving you permission to spend in alignment with your priorities and values yet still helping you to build your wealth and achieve your bigger goals?
Take a moment to honestly reflect with yourself about this. If you’re ready to learn how to start budgeting more intentionally and with a more positive perspective, check out these resources:
How to Start Budgeting In a Way That Actually Works (For Beginners)
Sinking Funds Explained: How to Level Up Your Budget and Empower Yourself With More Cash
The 6 Critical Steps to Build Wealth the Smart and Stable Way
Are you ready to take your financial journey to the next level? Then you may be ready to check out the More With Money Academy!
This ever-growing collection of online courses and trainings are specially designed to support entrepreneurs like you on your path to financial wellness. The Academy contains carefully designed courses that are easy to understand and implement so that you can be empowered with the practical concepts, streamlined systems, and powerful mindset to transform your business and personal finances.
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I'd love to continue the conversation in the comments! Feel free to share your thoughts.
Until next time!
Personal Money Management
Katie Scott
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