I’m fortunate enough to be delivering workshops and seminars for the one of our local Budget Advisory Services. I love this work, it’s an opportunity for me to teach people about budgeting, compounding interest and how to have more money in general. But on top of that I get to indulge in one of my passions and that is teaching people about the psychology of money – why some people have it and some don’t.
The training that I run for the budget service is based around the book The Four Laws of Financial Prosperity. That book is one of the most amazing books I’ve ever read, it’s simple, easy to follow and implement the strategies contained within.
In the sessions I run, one of the questions I ask the participants is:
- If I asked you to go to the grocery store for me, for some reason I couldn’t go myself. And I gave you a $100 note, stating that I had a budget of $50 and gave you a rough idea of the sorts of things I wanted, my question is ‘how disciplined would you be with my budget’? In other words would you stick to my budget of $50 or would you overspend?
- Everyone answered that they would definitely stick to my budget of $50
- Now I ask the participants what happens when they go to the grocery store with their own money, how likely would it be that they would stick to their budget. Most of them said that they wouldn’t.
- So I asked why that was, and their response was a blank. I suggested that maybe there was a possibility they valued my money more than their own?
This always sparks a lively discussion. It’s interesting that we would be very careful with someone else’s money but less careful with our own. Could it be that we think ‘there’s plenty more where that came from’? I doubt it.
Without realizing it, people give their money a personality all of its own. It’s almost as if the money takes on a life of it’s own, as if we don’t ‘own it’.
The other questions I ask is ‘when I mention the word ‘budget’ what immediately comes to mind – what words do you think?
Most of them respond that the word ‘budget’ conjures up feelings of ‘deprivation’, ‘restriction’, ‘doing without’.
After the three budget sessions, what happens is that they realize the opposite is true. A budget actually frees you up to choose what you’ll spend your money on. You can choose whether to have the paid TV channels or whether to spend that money on a new outfit. Or you could decide you really want an overseas holiday so you could begin to trim something from your budget and therefore allow yourself to have a much needed holiday. It is a choice.
The word ‘budget’ is almost like a four letter word – a dirty word to most people. So here’s a suggestion for you:
Rename Your Budget to something that brings you a sense of joy and excitement. Could it be your ‘wealth creation plan’ or your ‘holiday fund’?
Find out more great strategies in the book The Four Laws of Financial Prosperity to become financially free at The Four Laws of Financial Prosperity