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400 Reasons To Budget

July 27, 2017

Okay, so I’m not really going to list out 400 reasons to budget but if you keep reading you’ll see why the post is named as it is:)

You may or may not remember a statistic I shared early in this blog journey. All right, all right, I don’t expect you to remember everything, and some of you are newcomers and weren’t even around last year:) So, whether you read it here or already knew it, the statistic that so astonished me then was that according to a 2016 survey more than 60% of Americans could not handle an unexpected expense of $1,000.

Well, that is soooo last year.

The Federal Reserve has recently released the results of a survey of 5,000 households which indicates that approximately 46% of Americans cannot handle an unexpected expense of $400 or more. $400!

$400 does not cover all that much, people, and is a staggering indication of how close to the edge almost half of us are living (and maybe even doing yoga at the edge—dealing with the symptoms of stress instead of the cause:)). $400 might cover an airplane ticket to visit an ailing parent, but would likely not cover a full set of tires, or replacing an uninsured cell phone you may have dropped in the river or toilet (totally hypothetical), or a more-than-minor car repair (like the $1,200 collection of maintenance I had 2 months ago). I hear it would barely be a drop in the bucket for funeral expenses for a loved one and would just barely cover the least expensive refrigerator I found online at Sears but ONLY if you were able to take care of a 40% Memorial Day sale which is apparently still going on.

Ode to Sears.

{Speaking of Sears, it used to be one of my favorite places to shop with we’d go visit my grandparents in South Dakota. Any store they had that we did not have in Montana was automatically novel and had Big City Status. Pretty sure the Sioux Falls Sears was the recipient of hundreds of my hard-earned dollars even if the articles of clothing that were meant to elevate my middle-school status to “cool” didn’t quite do the trick. Now my only association with Sears is that there are taco carts on the sidewalk in front of it that I hear are pretty good. Anyway…}

Money does not = put-together financially.

Another thing that I found shocking was that nearly 20% of people making $100,000/year could not cover the $400 expense. The number of people who cannot cover the unexpected $400 expense is about 3x higher for those earning less than $40,000/year which makes more sense to me than the former statistic, but still!

A few months back, I remember being floored by a Dave Ramsey “Debt-Free-Scream” of a couple who had paid off something like $30,000 in 2 years while earning only $24,000 AND raising 8 children. Even if my recollection is fuzzy of the precise amounts, it was astounding what that family was able to do with discipline and focus and planning. My take away from their story is that there is no income level at which you cannot be blessed by planning your spending!

The 46%.

Back to the 46% who are facing borrowing or forgoing (if an option—it’s not always) the $400 expense. My heart aches for the STRESS these people have GOT to be feeling because I spent time in that territory. Denial is alive and well and in some cases gratefully helps you enjoy your present while not thinking about all the unexpected occurrences (financial or other) that are likely coming up. But there is really no way to prevent our things from wearing down or breaking or needing replacement or maintenance—every physical object does! Also, bodily disease and injury are alive and well and, while I am SO grateful for modern medicine, it does cost monies to treat. Fire, flood, wind…all real things that happen and have financial ramifications.

One of the main reasons why I love budgeting is the sense of control I feel.

I’m not obsessed with control, but there are so many things in life that we CANNOT control (the news does a real A+ job of bringing some of them to our attention), that it’s important we control what we CAN. Budgeting is just exercising control over the money you acquire (whether through employment, self-employment, selling stuff, inheriting, gifts, etc…except nothing illegal hopefully:)) to plan ahead for the things you know are coming (recurring monthly expenses, foreseen events like non-emergency surgeries) as well as those that unforeseen events (bad or good!) that make life interesting.

Oh, and one more thought.

Can’t help it. Or I guess I can, but won’t:) Just about any household could realistically make an extra $400 or more in a month for the sole purpose of squirreling it away for emergencies. Driving Uber, delivering pizza, housecleaning, babysitting, etc. These may not be glamorous activities but they capture for me kind of what people have done for centuries which is figure out a way to feed their families and pay for the things they needed and wanted. The super cool thing about budgeting is that if you decide to pick up extra work to beef-up your reserve (and, depending on your circumstances, start working on debt after that reserve), you will KNOW where to put that money instead of having it waste away. And hey, I bet if you deliver pizza you get some free pizza in your life and THAT is a good thing.

And hey, I bet if you deliver pizza you get some free pizza in your life and THAT also is a good thing:)