The Biggest Dilemmas To Overcome While Trying To Make A Budget

Budget dilemmas? One dictionary definition of dilemma is “a situation in which a difficult choice has to be made between two or more alternatives, especially equally undesirable ones.” That’s the key with budget dilemmas. Choosing between options you don’t like. Often, you need to cutback in some areas. Sadly, each will produce a bad result; but you need to lower expenses.

Budget Dilemmas Won’t Disappear With Inaction

Simply, a budget is a personal lifestyle Global Positioning System (GPS)–a tool to guide decisions to move living standard from point ‘A’ to ‘B’ wisely. As with a GPS, we start where we are and then travel to a defined place. If we do not use correct starting and ending points, we will be lost. Because resources are scarce, we will always have budget dilemmas.

Budget Dilemmas Inherent in Budgeting
Budget Dilemmas Inherent in Budgeting

How do we get over budget dilemmas? We must accept where we are. We must start where we are, not where we wish we were. The budget begins with the current financial condition and ‘maps’ how to reach specific goals in a defined future period. The charted course is filled with huge challenges because seldom do we have enough funds to do all needed priorities.

Budgeting is about choosing. Sometimes we must choose between one bad outcome and another bad outcome. It’s deciding between competing priorities. Selecting what to do and what to defer is a continuing test. Today, the United States must decide between lowering its debt, keeping its military capability, and sustaining entitlement programs, among other things. It can’t do all, although politicians tell us that’s possible. And they try to do all and borrow, spend, fall deeper in debt!

Budget Dilemmas Exist When Making Household Budgets

Households face difficult selections, too. In my experience, these three are the biggest budget dilemmas to get over as many folks prepare household budgets. We must recall always that budgets affect lifestyles.

  1. Saving a reasonable deposit to buy a home
  2. Saving regularly to buy the next car for cash
  3. Setting aside time regularly to apply a pre-spending decision procedure, and monitoring performance against budget

Saving A Reasonable Deposit To Buy A Home

Budget Dilemmas: Not saving - Not Spending on needed repairs
Budget Dilemmas: Not saving – Not Spending on needed repairs

The first budget dilemma for many households is how to live within fixed incomes, pay rent, and save a reasonable, 20-25% deposit, to buy a home. The desire to buy a home with a lower down payment is great. It becomes a greater test when the rent for a specific house might be below current mortgage rates.

We need discipline to get over the urge to spend and not save. We must sacrifice the short-term for the longer term. To save a 20-25% down payment, he or she must give up grown-up toys, eating out, buying gifts, cable TV, among other items. However, these sacrifices will pay off in the long term. They will lead to lower debt, less interest payments, reduced monetary stress, and a more stable financial position.

Saving Systematically To Buy The Next Car For Cash

The Capital Fund Key To Removing Budget Dilemmas
The Capital Fund Key To Removing Budget Dilemmas

The second budget dilemma to overcome while budgeting deals with a car. How do we stop making car payments as we provide for daily needs? We must recognize that where we live and where we work can affect our transport needs materially. We can carpool, live close to work, or live where we have access to good public transit. Besides, we should distinguish between weekdays and weekends. We could rely on carpooling or public transport during the week, and on a rented vehicle some weekends.

During this period, we need to identify a monthly sustainable car payment to pay to us. When the time is right and funds are available, we buy the car. But, we would continue paying us, so we buy the next car for cash.

Setting Aside Time Regularly To Apply A Pre-Spending Decision Procedure

Investing Time In The Process Removes Budget Dilemmas
Investing Time In The Process Removes Budget Dilemmas

The third budget dilemma deals specifically with key behaviors that affect spending directly. First, despite many daily priorities we need to invest time to use a formal pre-spending decision procedure consistently. It’s behavior that drives spending. Second, though it will add to things to do, we must monitor actual against budgeted spending, regularly.

Surely, the constant cry will be, “I don’t have time.” But, as we know, we have 24 hours daily. So, the issue is, how badly do we want to be free from continuing financial stress and become debt free?

As with most goals, getting through these budget dilemmas needs discipline. The journey might be long but the benefits are great: debt freedom, financial stress freedom, and healthy family relationships. Are you ready to overcome these budget dilemmas and start budgeting?

Copyright (c) 2013, Michel A. Bell


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Michel A. Bell

Michel A. Bell is a former senior business executive, author of five books, speaker, and adjunct professor of business administration at Briercrest College and Seminary. Michel graduated from Massachuetts Institute of Technology with a masters of science in management. He is founder and president of Managing God's Money, a private mission devoted to teaching biblical stewardship of time, talent, money and other resources. Visit Managing God's Money

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