Without a budget you are not in control of your finances and have no way of measuring your success or failure

But all of the information and tools about preparing budgets are missing the point.  Do people get into debt because they don’t understand that they are spending more than they earn?  I don’t think so.

Preparing a budget is the easy part.  It is sticking to it that is difficult.

I can relate a story from my own slide into debt problems that illustrates the point.  A long time ago I made the effort to total up all my expenses and income.  I worked out how much my wife and I had to spend on “fun” things and decided to keep track of this by the extremely high tech method of keeping this money in an envelope each month.  One day nearing the end of the month we were shopping and my wife wanted to buy lunch in a restaurant.  I said we didn’t have the money (trusty envelope in hand!) and we had an argument about it.  In the end I gave in and we bought lunch on our credit card.  Our collective weakness was a sign of things to come.

There is a reason why lots of people give advice on making budgets but not so much on sticking to them.  That’s because one is simple and the other is very hard and complicated.

No money management tool will solve your money problems for you

Sorting out an addiction to spending is like dealing with losing weight or a chemical dependency.  The motivation for it needs to come from within.  You need to spend time thinking about why you want to spend money – is it to make up for low self-esteem or is it the result of problems in your past or even the way your parents managed money?  Understanding the reasons behind your desire to spend and addressing them is the real key to solving your debt problems.  Once you have done this then you can use any method for calculating you budget – a spreadsheet, a web-based tool, the back of an envelope!  It really doesn’t matter once you have discovered the motivation to sort out your money problems.

A lot of advice also ignores the uncomfortable fact that many people are not in debt because they spend on luxuries.  They have problems because they cannot earn enough for essentials or because of medical emergencies.

Have you had money problems and overcome them?  What was your motivation to do so?