Lea Satterfield, MBA, is a course instructor for MPowered Couples course.
I’ve grown up attached to the personal financial planning field.
I went to a week-long camp about finances in high school, where I was taught the concept of a budget. I chose to study personal finance in college, where again I was taught the concept of a budget. Generally speaking, I was told to set up a spreadsheet saying how you’ll spend money and then spend in accordance with the budget and don’t go over the limits you set.
Did I ever once set up a budget? No.
I met my husband who is a CPA. He had a budget. We combined our finances and he set up a budget for us.
Do you know what I didn’t live by? Our budget!
I had never lived by a budget, yet I had no debt to my name and I always paid off my small credit card every month. My husband had multiple kinds of debt and I had more savings for retirement than my husband did when we met. In fact, he had no retirement savings.
So, to me his budgeting in no way correlated to the fact that we would be financially sound if we made a budget and stuck to it. I would internally roll my eyes every time he talked about our budget or that we needed to update our budget. I’m sure he felt I was dismissive … which, admittedly I was.
Why I don’t like budgets
So, why was I dismissive of budgets? I am not a rule follower. In fact, I’m quite stubborn and if you try to put me into a framework, I will figure out how to break out of it. I’m not saying it’s a good trait, but it is just a truth of mine. Budgets didn’t seem to fit me.
What I want to spend money on this month is always different from what I will want to spend money on next month. So, putting some arbitrary numbers on a page based on historical averages made no sense to me. This month I may need to pay six months of my car insurance to get a lower rate, next month I might have a shower for a friend and want to get them a nice gift.
How do I set a budget at the beginning of the year for all of these things? I may not even know at the time of making a budget that these expenses will arise.
Budgets vs. Real Life
My oldest daughter was just shy of three years old and she hadn’t been feeling well for about a week. We’d been to the doctor who had diagnosed her with a “gi bug” that had been going around which felt very vague at the time. Mark was on a work trip. In the middle of the night, about 1 am, she woke up screaming. Not fussy, or unsettled. Screaming.
I used my regular techniques to try to soothe her: rocking, patting her back, nursing. None of which was she having. She kept screaming.
So, I took her down to the kitchen thinking that maybe a warm drink or something to eat may snap her out of it. No, she kept screaming. I walked towards the fridge, and I turned around and she doubled over at the kitchen counter, holding her stomach. I knew at that moment that this was not good.
I immediately called the emergency line at her doctor’s office, which connected us to a nurse at a local hospital. The nurse said that since she was unsettled for over almost an hour, they recommended that I take her to an emergency room. An Emergency Room! Our daughter had thankfully been healthy, so we hadn’t done this before together. I certainly hadn’t done that on my own, either.
The nurse asked if I knew which hospital I would take her to. My mind was racing — there were three options relatively close.
My gut reaction was and question in response to her was, “if she has to have an appendectomy tonight, where do I want her to be?” I don’t know why that was my question, but it was.
My question was not “Which hospital is in-network for my insurance?”
My question was not “I’ve got $250 left in my FSA, where will that cover the most?”
Most importantly, my question was not, “Which hospital is within my budget?”
At that moment, all I cared about was my daughter receiving the best care.
People are more important than budgets
We went to the hospital the nurse recommended in response to my question. Luckily, the doctors on call were fantastic, and, after running some tests, quickly decided it was just related to her “gi bug.” Within 24 hours of coming home from the ER that night she was completely better. So, while we got no sleep that night and it took about five years off my life, we know she got good care. The budget could be damned at that time.
There are other times we may face things that come up. This is why we build our emergency savings, so we can answer with a question unrelated to money. So, if you are not a fan or don’t stick to budgets, that is, in my opinion, OK. Some may tell you differently, but maybe they’re rule followers.
If a budget works for you, then keep going! Power to you! Don’t let my story stop you! Make sure your budget includes putting money into an emergency savings account, saving for retirement, and putting money towards other goals you may have.
Find a system that works for you, holds you accountable and keeps you on your path to financial security.
- Not everyone has a budget, and that’s ok.
- People are more important than money.
- Create a system for managing your finances that holds you accountable.