Friday, March 21, 2008

Budgeting is Only for Lean Times??

I've seen a couple finance articles online recently that completely baffle me. They both have tones of "well now the recession is (almost)here, people will need to start budgeting and/or practice frugality."

Say what?

Budgeting is only for lean times?

I think this actually says quite a bit about US society. The US has very developed I Want and I Follow dispositions, and I think this only ever becomes realized during a recession. Subprime mortgage crisis? A case of people following the "You need to buy a house! It's a great investment! Don't pay someone else's mortgage!" spiel given by real estate agents and certain homeowners everywhere. Excessive consumer debt? "Oh, but I just have to have the new [iPod/computer/car/lawnmower/etc!]"

It's really sad, in my opinion, that budgeting only ever seems to be talked about on a large scale when the entire country is hurting, and that the only time some people only ever consider budgeting is when money is tight or they have developed a debt problem. Unless there is a recession, it's all spendspendspend! and deferred payments and No Credit? No Problem! This really makes me want to scream.

I've seen in some blogs that people wish there was financial education as part of the school curriculum. This would certainly be a good idea. The idea that children learn how to budget and save with their allowance money is also a really good idea. I remember my dad giving me extra chores so that I could earn extra money to buy a big dancing doll (I was seven, ok?). It was the beginning of my "if you want it, you have to work for it" and "don't have enough? Find enough!" education from my dad. Sadly, the second point didn't quite stick as well as the first (i.e. I have debt), though the first one has always stayed with me. The first point also developed into "if you want it, go after it (because it's not just going to come to you)" and this was a very important lesson to me.

One of my favorite quotes is by Abraham Lincoln: Good things come to those who wait...but only things left by those who hustle. I strive to follow this as much as I can (and it works!). I wouldn't be self-employed if I didn't hustle (oh, to just have good clients handed up on a platter!!), and I would just be another unhappy 9-5 drone, earning too little and dreaming of windfalls or easy money schemes that would "solve all my financial worries."

Budgeting should not be exclusively a lean time activity. You know this, I know this, but so many non-personal finance savvy people don't. I know this is frustrating to more than just me. It kills me when I see people I know shopping for things they can't afford, or to spend significant money on wants when they don't have a retirement account. Though I long ago learned that if you say something to someone and they don't respond, let them be because continuing endless on any topic isn't going to change anything (except have them think you have a superiority complex). As an example, I know someone who I think has some great skills that would make her some really good money if she was to do some freelance work. However, she doesn't do this (though if someone else found the clients, I bet she'd do it...) and she lives paycheck-to-paycheck.

So yes, it frustrates me how the media and society view finances. The US is a nation of impatience and overwhelming debt, yet it seems the only time frugality is talked about is when the nation's economy is in a severe downturn.

1 comment:

Nathan Blair said...

I agree - it should be that the effects of frugality are most easily seen during a recession. Hard times show people for the kind of savers and spenders that they are and have been. If they've been smart, good for them.