Weekend Reading: Hate Budgeting? Try Rethinking It
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
The traditional needs versus wants paradigm is what often makes budgeting sound as much fun as going on a diet. This not only creates a lack of motivation to follow through with your budget, but also leaves you feeling deprived.
READ THE ARTICLEThe problem with a this-or-that budget: When Maslow’s Hierarchy is applied to money management, anything other than “basic survival needs” is labeled as a “want”. As a result, items under the categories of entertainment, social connection, dating, education, etc. are put to the wayside.
A better way: To make the concept of a budget feel less restrictive, a mindset shift to a “needs versus strategies” framework can help. Here, needs are universal and fundamental, covering five categories: Survival, Security, Love/Belonging, Esteem and Meaning.
An example: In the instance of your daily purchased cup of coffee, it might not be the coffee that’s a need, but the experience you have enjoying it with a friend. If this social connection is a need, consider how you might still fulfill that without buying a cup of coffee each day.
Budget with your head and heart: It’s not always about what makes the most financial sense. Contrary to popular belief, your emotions should be taken into consideration for every financial decision you make.