I'm an avid reader of iHeartBudgets, and Jacob really does love his budgets. The tagline of his site is “Just because you make money, doesn't mean you know what to do with it.” I'd even take that one step further and say, just because you're a financial planner/blogger/investor/money guy/etc. doesn't mean you know how to deal with money. But budgeting can be depressing, and it can create a cycle of depression if you're not careful. And it can even lead some to avoid budgeting.
Budgeting Can Be Depressing
Budgeting can be depressing because if you don't create a realistic budget, you just end up missing your budget – which can make you sad. For example, Jacob dives into Crystal's Budget and tries to help her achieve her goals. However, one premise of her budget is that she needs to earn an extra $1,250 per month to make it work, which is 15% more than what she currently brings home according to the current budget. That is a big jump. And if she doesn't make it, the rest of her budget will be off, and she will feel like she is drowning in her finances.
However, it's not just the income side that can be depressing either. If you try to trim the fat too much on a budget, you will just feel sad because you can't spend. It could get worse and you could feel trapped because maybe you've never cooked before, and your budget doesn't include any money for eating out. So, now all you eat is undercooked flank steak because you don't know any better.
Where Does a Budget Get You?
In the end, if you follow your budget to a “T”, you end up sad because you have a lot of money in the bank but feel like you can't spend it. And then you worry about not following the budget and falling off the personal finance wagon.
A budget may have helped you achieve some intermediary financial goals (like paying off debt or saving for a vacation), but that is only if you budgeted for them to start with. Don't plan on having any exciting memories of a spur of the moment trip.
How to Avoid Depression While Budgeting
The best thing you can do to avoid getting trapped in your budget is realize that it is a living document that needs to adapt to your current circumstances. It should almost be a goal sheet, not a “must do” sheet. That way you're not trapped in your budget, but at the same time you can use it as a tool to help you going forward.