Budgeting Part 1 – You WILL Fail Without a Budget

You need a budget

You need a budget, you WILL fail without one

Wow, that’s a pessimistic view of things, isn’t it?  

What happened to hope and encouragement?  You might think, “I make plenty of money, I’m smart, and I always manage to pay my bills on time, so what’s the point of a budget?”  Trust me, not using a budget is like a patient with 15 medications refusing to use a pill organizer.  You think you’ll be able to keep yourself on track, but you’re absolutely kidding yourself.

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I’ve coached over 300 families on managing their personal finances, and the number one thing that derails a financial plan is failure to make and stick to a budget.  According to a major national survey of millionaires, over 90% of millionaires know what their money is doing each month.  If you want to be skinny, eat and exercise like skinny people.  If you want to build wealth, you should follow the habits of millionaires.  

Overwhelmingly, people who become millionaires use a budget.

Debunking the myths

Myth #1 – You don’t need a budget if you make enough money.

There is no amount of money you can make that negates the need for a monthly budget.  The average millionaire doesn’t stop doing a budget after their net worth crosses the million dollar mark.  Stopping a budget at that point would be like losing 30 pounds and then declaring, “I reached my goal, so now I can eat junk food and stop exercising.”  

The more money you make, the more you stand to lose through poor money management.  Conversely, when you have a very low income, you have to make every dollar count.  So, that means everyone needs a budget! 

Myth #2 – There’s no way to make a budget if you have an irregular income.

We’ll talk about this more in the third part of this three-part budgeting series, but folks with an irregular income aren’t off the hook. 

Let’s say you make a salary of $60,000 per year, but you get a productivity bonus of $15,000 once a year.  I have seen many people use that $15,000 to “impulse buy” a car, or a boat, or an expensive vacation and then look up three months later and wonder why they’ve made no progress on their student loans. 

Myth #3 – The budget constrains and limits me.

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This is just dead wrong.  The budget gives you freedom!!  Remember, you make the budget, so you control it!  

Consider this: if you decide to build a house, you and an architect will create some blueprints for the house which specify how the house will be built, what materials to use, and where it will be located.  You get to design the house exactly the way you want.  Are those blueprints limiting?  No!  They ensure that the house that gets built is the exact house you envisioned.  The budget is how you direct your money, not how your money directs you.   

Myth #4 – My spouse and I will just fight about the budget.  It’s not worth it.

Dave Ramsey is a national bestselling author and financial coach.  He is fond of saying, “The number one cause of divorce is money fights and money problems.”  Having coached hundreds of couples who struggle with their finances, I can tell you that this is absolutely true.  

I have seen couples go through messy divorces over an inability to come together on finances, but I’ve also seen couples save their marriages by just sitting down and agreeing on their financial plans.  Money is not the most important thing in life, but it does interact with every aspect of our lives.  

By agreeing with your spouse on the budget, you’ll be agreeing on your dreams, your goals, and the management of your family.  Don’t miss this!  

If you want a happy and healthy marriage, you HAVE to do this!  

Money is the number one thing that drives couples apart, so address it head-on!  In part 2 of this series, we’ll get into more detail on how to go about doing this.  

By the way, if you aren’t married yet, make sure you and your future spouse do some in-depth pre-marital counseling so you can get on the right track before you get married.  

Myth #5 – It’s too hard to do.

You’re a doctor, or a nurse, or a dentist, or an allied health professional.  You’ve spent your entire career doing things that are too hard for most people.  Trust me, this is not beyond your skills and abilities.  This is 5th grade math.  It’s not complex, it’s just a matter of sitting down and doing it.  

It typically takes three budget cycles or about 90 days to get good at doing the budget.  When I first started out, it was laborious and frustrating, but like any other new skill, I gradually improved and eventually it became easy.  

During the first month you do the budget, you’ll have 30 things come up unexpectedly that you didn’t plan for, like a kid’s field trip, a car needing an oil change, or a parking ticket you didn’t anticipate.  You’ll learn from those mistakes and the next month will be better. 

Myth #6 – I don’t know how to do any of those apps or software, and I don’t have time to learn.

You don’t need anything other than a pencil and paper to get started!  In fact, I highly discourage getting an app or a software program until you make it through the first 90-day budgeting process.  By then, you’ll have a good idea of how to plan your income whether it’s steady or irregular, and you’ll know what you need a budgeting application or software program to do for you.  

There are a lot of great budgeting programs, but don’t get hung up on this yet.  Start slow and work your way into it.  A pencil, a piece of paper, and a cup of coffee should be all the equipment you need for the first three months.

Myth #7 – A budget means I can’t have fun anymore.

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Remember, the budget is how you tell your money what to do.  That means you can dictate the amount of fun you have.  I strongly recommend building some opportunities for fun into the budget.  If you don’t, you might be able to save more money in the short term, but statistics and my experience with financial coaching say that you’ll burn out.  

Include a small amount of money in the budget for you and your spouse that you can spend without restriction.  This doesn’t have to be a big amount, maybe $20-50 per person per month.  Don’t go overboard with this and sacrifice long-term goals, but be sure to have some fun along the way.


In part 2 of this series, we’ll get practical on how to design a budget.  If you want your long-term financial plan to succeed, this is something that you absolutely have to do.  There are no exceptions to this rule.  At the beginning, you may feel overwhelmed, stressed, and afraid of failure.  Don’t worry, you’ll get better!  Over time, this will get to be fun!  Let’s get started! 

Leave a comment below and tell us about something that makes you nervous about doing a budget, or drop a note of encouragement on how a budget has helped you succeed.  

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Further reading

budget, business, dentist, leadership, personal finance, personal growth, physician, practice management

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