Is It a Budget or Is It a Spending Plan?

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It’s both!  When you are planning where your monthly income goes, you can call it a budget.  Or you can call it a spending plan.  Generally speaking, I use these two terms interchangeably.  But most times, I refer to it as a budget, because it’s just shorter and easily recognizable.

It doesn’t matter what you call it.  What matters is the headspace you are in when thinking about managing your money.  Let’s look at an analogous scenario.

Need to lose weight?  You can go on a diet, or you can create a healthy eating plan.  No one — not a single one — thinks of the word diet in a shiny positive light.  Diet sounds restrictive and punitive.  Frankly, it sounds like something I want to run away from.

On the other hand, a healthy eating plan sounds appealing.  I can get on board with THAT.  It sounds proactive and forward moving.  The word “plan” is key.  You plan what you will eat, within the framework of healthy guidelines, and you dine on auto-pilot.

For many people, a budget carries the same gut-wrenching negative feelings as a diet does.  Budgeting sounds restrictive and punitive.  Like you’ve been an unruly child in need of serious consequences.  You misbehaved and mismanaged your money?  Well, now you are on a BUDGET.

Having a spending plan communicates something that’s much more positive.  Planning connotes looking ahead and making sure your resources will go the distance.  It also suggests you have the opportunity to correct-course if things don’t go as planned.

But in reality, aren’t diets and healthy eating plans the same?  Of course they are.  Just like a budget is the same thing as a spending plan.  What really matters is how you think about the situation.  In order to be successful with your healthy eating or your money, you need to have a positive mindset about it.  Regardless of what you call it, when you think of the process, does it fill you with dread?  Or enthusiasm?

To be successful with your money, you must be the boss of it.  Of course, you need a good relationship with your money, but ultimately, you need to be in control and call the shots.  Thinking like a leader will help you plan out your household spending with authority and avoid letting your money get out of control.

Too often, financial experts succeed at the logical side of money but fall short when it comes to the emotional side.  To me, both sides are important.  You absolutely need some basic knowledge about how finances work to be successful with your money.  But you also need to know thyself.

I frequently talk with people about the emotional mindset of money.  I can offer counsel all day long about what you should do with your money.  But financial direction isn’t effective unless you’ve got the right headspace.  But how do you get in the right headspace?

Getting there begins with positive framing.  Stop thinking of money in a negative way.  Money is a tool, nothing more.  Be in the driver’s seat when it comes to dealing with it.  Changing your attitude isn’t as easy as flipping a switch.  Many people have deeply held beliefs about money that take time and effort to change.  Just start with Step One.  Reframe negative thought patterns into positive ones.  We’ll explore some ideas about how to do this in future blog posts and in our newsletter and podcast.

Call it what you choose but be sure whatever you call it underscores your control over your money.  Keep your mind in the right place to lead the charge to better household financial management.

For me, I’m fine with calling it a budget, so I typically do.  I know my head is in the right space to be successful.  As for dieting, I’m nowhere near ready for THAT.

Is it a budget or a spending plan?  Share your thoughts below.  Or if you want some like-minded friends, join the free SimpleMoney Community on Facebook to share your budget wins or woes.


You might also like these posts, Give Your Money a Job and Money, Is it Good, Evil, or Just a Tool.


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