Budget Phobia: 5 Reasons Why Making Budgets Can Be Scary

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Everyone says they want to take control of their finances.  Yet not everyone is willing to take the first step needed in order to do so.

And that first step is to prepare a budget.  (Or a “spending plan,” if that’s easier to say.)  Without one, it’s impossible to know how much money is coming in, how the money is being spent and how much is left in order to build a solid financial future.  Or not.

So why the budget phobia?  Why so difficult?  Here are five possible reasons.

  1. Self-Worth Issues:  We women are often too harsh on ourselves.  We don’t want to budget in case the numbers we see are messier than we think they should be at this particular stage of life.  That would somehow be a reflection on whether we are “good” or “bad,” “worthy” or “unworthy.”  But that is confusing net worth and self worth.  How much money we have has nothing to do with our worthiness; instead, it’s a simple snapshot of a moment in time.  It reflects the series of events that have occurred in the past, and that can easily be changed in the future.  In fact, a budget can provide the exact information needed to make those changes effectively.
  2. Mortal Fear:  Fear is a discomfort about the future.  Fear about money is a discomfort about whether or not there will be enough money sometime in the future.  Some women don’t want to make a budget because it may show them how unprepared they are for the future.  But the truth is that they are actually in greater fear because they are ignorant of their real financial situation.  More often than not, women who do create a budget find they are better off than they expected (or at least they can get things under control more easily than they expected).  So budgets are fear-killers instead of fear-creators.
  3. Not My FaultIt’s easier to blame someone else for our situation (whatever it may be) than it is to take responsibility.  Maybe we blame the poor economy, our nasty bosses, Big Government or our sixth-grade math teacher for what’s going on financially in our lives.  But once we start putting numbers to paper and creating a budget, it’s obvious that we are the ones who took the actions that resulted in those numbers.  (It’s hard to blame our boss for the expensive new shoes we absolutely had to have.  Or our sixth-grade teacher for the three dinners out last week.)  On the other hand, if we’re responsible for those expenditures, we are also capable to changing them in the future.  And a budget will show us where and how to do so.
  4. Shame on MeAs long as we don’t know our numbers, we can hide from what we suspect is our financial situation.  We’ve heard others called “compulsive spender” or “irresponsible” or “out of control.”  We’ve seen people who carry large debt looked down upon.  After all, solid citizens don’t behave that way.  So we continue to hide by not opening bills, credit card statements and bank statements.  And by never preparing a budget.  For the time being, it feels as if “ignorance is bliss.”  But that bliss somehow feels pretty lousy.
  5. Guilt Trips:  If we do decide to take responsibility for expenditures, we can look at the situation two ways:  we can let it paralyze us with guilt and that paralysis often takes the form of beating ourselves up and wallowing in our poor choices.  Or we can look honestly at the behaviors and recognize them as being unhealthy.  We can move on from there based on healthier behaviors made obvious by having put together a budget in the first place.  Guilt gets us nowhere.

The biggest problem with budgeting is that it is fraught with emotion.  That’s what leads to budget phobia.  Not because the process itself carries any emotion, but because we lay all sorts of emotions on it, starting with these five.

To end budget phobia, the key is to continually remind ourselves that budgets are just numbers.  That these numbers can actually be the life preserver we need to get control of our financial lives, instead of what is causing us to drown.

Hmmm, could a budget actually be a friend and not a foe?

Let us know in the Comments section below if you have mastered the creation and use of a budget?  If so, how has budgeting changed your financial outlook?


Bio: Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial  peace of mind.

  • Susan Schiller

    Well, I like the name “spending plan” instead of budget… for some reason it sounds less fearful, because I do have a budget phobia. The first thing I thought of in reading your article, Sharon, is how you always know exactly what’s going on in our heads! And with a gentle hand, you begin to wipe away our fears and show us the possibilities, step by step!

    • Budgets got such a bad rap, Sue! I guess “spending plan” sounds more generous, something that’s flowing out instead of creating constraints. The funny thing is that, once someone has gained the control that comes with a good budget, they feel much freer when they spend because they know they can without causing problems. Ironic, huh?!

  • MariAnnLisenbe

    I have to say, that email lead in was one of the best I’ve ever seen 🙂

    • It was after 2 a.m., Mari Ann. I don’t know if I was bone tired or inspired … 😉 But thank you!

  • Ohhh, I know you’re nailing me to the wall when I continually try to skim over the article instead of really absorbing the words. Yikes! And that’s how I’ve felt about budgeting (since my divorce) – if it’s uncomfortable, I’ll just ignore it. Your article hits home right where it hurts!

    One of my big goals for the year is to leave the emotions out of my money story. I was nonchalant about money before my divorce, but in the 7 years since then, I’ve faced quite a few interesting hurdles I would have never expected. There’s an underlying fear that I “can’t do this by myself” that I’m continually struggling to overcome. The realization from your reminder that a budget is just numbers will become my mantra as I ease back into monitoring my budget.

    Thank you, lady. Your posts inpsire me to greater heights and I feel like the perspective you bring about any area that is not my strong suit will help me become a more well-rounded person. Muchas gracias!

    • I know it seems overwhelming when different pieces of our lives feel out of control, Janet. If I can just get you to try budgeting honestly (and gently!) so you understand the flow of your money, I know it’s an issue you can cross off your list of overwhelms! The form I use with clients is “gifted” in this earlier article: http://ow.ly/chKgb Maybe it will help … 😉

  • Lorna Tedder

    Great points! Especially #4. That’s the hardest, I think–actually having to see at your numbers and take responsibility.

    • It only feels hard for a moment, Lorna, until you realize that you can’t fix something you don’t acknowledge. Actually putting numbers down on paper (and accepting that they’re not judging you but rather just reflecting earlier decisions), you can see what you’d have to change to get everything in balance. As I said to Janet, the form I use with clients is “gifted” in this earlier article: http://ow.ly/chKgb Maybe it will help … 😉

  • Sandy K Hardy

    I have a hard time budgeting. How do you budget with an income that fluctuates?

    • Fluctuating income can make budgeting more difficult, Sandy, but if you start with the obligations part, those things you absolutely HAVE to pay, then with the next critical ones (from ‘needs’ to ‘wants’) it’s real clear how hard you have to push to cover them. It’s not ideal, but at least until you have momentum in your business (and less fluctuation) it will at least give you a feeling of control.

  • Gilly G Fisher

    Thanks Sharon, such a great article to remind us…Not opening up those bills just adds more to a stressful financial future 🙂

    • Not opening bills certainly does add to stress, but you’d be surprised how many people choose that strategy, Gilly!

  • fredmcmurray

    I can relate to mortal fear:-)

  • Kung Phoo

    Lately i have had budget issues, but i am having an event for my son, so its hard to stay on budget with rising prices.. But we are very close..

    • Expenses that are an exception do make budgeting difficult, Rob, unless you’re able to save up in advance for them. But for many business owners, until they have full momentum in their businesses, it’s a matter of playing catch-up after the fact. However, by having all the numbers in front of you, you’ll have a greater sense of control because you’ll know exactly where you stand!

  • Alexandra McAllister

    I believe I’ve mastered the creation and use of a budget since I had no other choice. It wasn’t until i lost everything that after the shock, I had to take my situation in my own hands. It was like growing up! It’s still a challenge to keep on a budget although it is getting easier…with time. 😉 Great post as always. Thanks, Sharon.

    • Glad to hear it’s getting easier to keep on a budget with time, Alexandra. Unfortunately, too many of us learn about budgeting AFTER we’ve faced a financial disaster of some sort. I know that was my case …

  • Nate Leung

    I believe that many of us can relate to this post. One way or another there is always a phobia that is hindering us from moving forward. Thanks for the great post!

    • Digging at those phobias that keep us from moving forward is truly the key, Nate. Lots of times it’s something that comes from childhood that we can release as soon as we realize it no longer makes any sense.

  • Norma Doiron

    I’m doing real good with budgeting these last years. I guess we really do learn and we do get wiser! Did that, done that and not doing it anymore… getting in $$$ messes! 🙂

    • Yay for you, Norma. Yes, we do learn … although some take more ‘trips to the corner with the dunce cap’ than others! What certainly helps is having someone explain how we got there and how we can get out … that financial literacy class we could have all used in school.

  • Scott Glaze

    Budgeting is very rewarding when done successfully. I am sure it can be difficult if you do not have a strong enough partner.

    • A partner that sabotages someone else’s budgeting and financial planning can be devastating, Scott, you’re right. Especially since it often takes on an aspect of deceit.

  • Tereza

    Budgets are just numbers, indeed!

    • Yup, you’re right, Tereza. By keeping the emotion out of budgets, they’re far easier to prepare and live with.

  • Roz

    I have avoided budgets most of my life yet somehow stay within my means. When I’ve strayed, I knew it and throttled back. To me formal budgets feels confining, restrictive and that goes against my nature. I know some people really need to have them and a few of our kids strictly abide by them. The hardest has always been for me when looking to treat one of them who uses a buget and I’m asked- how much can I spend, or how much are you willing to spend? It forces me to set a limit and I resist that.

    • As long as your system has worked, Roz, whether you budgeted or not doesn’t matter. Lots of people have a form of financial radar that works well for them. All that matters is that you’re in a safe zone often enough to be (and stay) financially sound!

  • Carmen M Perez ELO

    You are so right. I remember looking at my budget and being filled with judgment about what I had and didn’t. Great post. Thanks. Xx

    • I hope you’ve been able to let go of and judgment about what your budget showed you, Carmen. Once we recognize the ‘error of our ways,’ we really need to learn from them and just let them go. Otherwise they continue to pull us down.

  • Sharon Mele

    I don’t have a budget I just keep in all in my head! But I suppose I should because its probably a good thing.
    It doesn’t take much, being that I live in Southern California,,,,well it is expensive here and after I pay the mortgage
    there isn’t much left to do any budgeting with…..just saying…..

    • Lots of us try to use our ‘financial radar’ to keep track of things, Sharon. On the other hand, you might find some pleasant surprises if you DID take your budget out of your head and put it on paper. It’s a totally different feeling of control …

  • Tina Ashburn

    I find a budget helps a lot. I have 2 lists, one for every business bill and one for every person bill I must pay every month. Anything left over goes into my travel fund! It has helped tremendously to plan and plan and plan.

    • Budgets take all sorts of forms, Tina. Whatever works for you works for you! (That’s critical because if you try to use something else, that could create resistance and you may not budget at all.)

  • Jackie de Boer

    I was much better at budgeting when I was young, single and didn’t have a lot of disposable income, budgeting was a case of survival then.

    • It certainly is easier to budget when survival says you have to, Jackie. But, truth be told, with a lot of disposable income you’ll find that budgeting makes it easier to use your money most WISELY.

  • Marielle A. Lord

    I used hate/fear budgeting too. But since I’ve started facing my debt monster and realized that number are just that, numbers, they can go up and they can go down. And If I put my mind into it I can get rid of that monster fast, which is why budgeting is not something I fear anymore.

    • That’s fabulous, Marielle! Removing that fear and just dealing with the numbers as they present themselves means you have taken control. Brava!

  • Diana Foree

    I’ve always hated a budget but then we are not big spenders. We live within our means and always have extra left over at the end of the month. But there’s always room for improvement that a budget can bring to the forefront. Good info!

    • Diana, just try budgeting for 2-3 months and see if you don’t feel a different sense of control. The result could be slight changes in how you spend … and even the ability to save more so you can reach true financial peace of mind that much sooner.

  • Lynn O’Connell

    Raised by accountants! Didn’t appreciate it at the time, but knowing how to create a budget and read a balance sheet has been very useful.

    • Thank them every day, Lynn! If you knew the battle some people have — and the resistance they deal with — you’d be even more grateful your parents instilled that in you. 😉

  • Budgets are very important and can be very scary if you have never been had to use one.

    • Yes, they can be, Carly. But that’s only until someone feels the comfort of knowing what their numbers are …

  • Yvonne

    I am a letter/words person—learning to embrace numbers! Thanks!

    • Embrace, embrace, embrace, Yvonne! Just remember that neither words nor numbers–in and of themselves–embody judgment. 😉

  • You are so right Sharon!!!! I think fear is a big driver. Many just stick their heads in the sand and ignore their finances because of lack of money. Many times they end up making a bad problem worse. Or, they other issue can just be laziness or a false belief system that it will just always be there.

    • The other side, Don, is that sometimes people think their financial situation is worse than it really is. But by putting everything down on paper, they can see how they can easily tweak one or two things … and actually remove the terrible stress they’ve been facing each month.

  • Terri Lind Davis

    I have to admit at times I have been one of those who have stuck my head in the sand in regards to a written budget, both in good times and bad. I am trying to be more focused on that now.

    • Terri, what if you committed to preparing a written budget at the start of 2-3 months, even if just on a yellow pad of paper? (Whatever’s easiest for you.) After that short period, you might already realize how it removes ‘unknowns’ that otherwise take the form of chatter in your head.

  • Shari

    I like “spending plan.” I also like your idea of the financial picture as a snapshot. That’s a nice metaphor that doesn’t go to self worth or long-term patterns. Thanks, Sharon. Your posts always make me think.

    • ‘Spending plan’ is fine, Shari. It’s just semantics. But whatever makes it easier to actually prepare one is what counts!

  • Simona R.

    I have monthly spending plans – I use Mint. I rarely overspend so my favorite end of the month activity is to transfer what I did not spend from a category directly into my savings.

    • Mint is great, Simona. My next question is: what are you doing with what is in your savings? I think your background is Eastern European, no? If so, you certainly know what inflation and currency value can do to savings … so be sure to take that next step in your financial learning if you haven’t already.

  • Pat Moon

    Sharon, you always lay it right on the bottom line. I appreciate the comparison of ‘net worth’ and ‘self worth’. Sometimes we seem to believe our ‘net worth’ determines our ‘self worth’ because we forget that ‘self worth’ is not determined by how much money we have. I am from the old school that likes to know what is happening to the money I do have. I’ve used the quicken software for years to track our spending and help plan for the future. In recent years, we have switched from using credit cards to paying cash for most spending. I even keep those cash receipts and enter them into quicken. At the push of a button I can tell you how much we spent on groceries and how much we spent on dining out last month or last year or can compare the past 2 years. I even know how much it costs to own a pet and feed them. I love your common sense approach of not being ignorant about where the money is going and has gone.

    • Pat, the control we feel using something like Quicken is so important, especially as we get a bit older and are pulling out of some sort of reversal … as 2008 was for so many. Even if you’re spending on a cash basis, that doesn’t change the need to know. I’m happy to hear you’re feeding that need to know; you deserve the comfort it brings. 😉

  • For so long I had a budget and did really well. Then I let is slide and haven’t regained my footing since. Also working on building my business has left funds really tight so my budget is awful right now. This is what I am currently working on changing.

    Thank you for your amazing insight as always. I love and value your posts.

    • Give yourself the gift of the peace of mind brought on by following a simple spending plan, Katrina … and monitoring whatever your business is consuming. Even if the numbers are tight, they’ll feel less so if you can know them by simply looking in one place. I know how much you’re investing in your business–I can see your efforts online–and that’s fine, but don’t leave the numbers in just your head …

      • I did have to write it down. I needed to see what I was spending and where I can bring in more business. It is not easy taking a reality look at where you are at.
        I have forced myself to be realistic and take a hard look at what I am doing financially.

        • That’s all you can do, Katrina. With those numbers, you’ll make better decisions on the spending side and, if you’re keeping track of conversions, for example, you’ll know where to focus your future spending. Good luck to you! 😉