How to Create a Budget that Doesn’t Make You Feel “Trapped”

Imagine watching your favorite sport. What would the experience be like if the game didn’t have any rules? No scoring system, no penalties, just make it up as you go. It’d be a free-for-all, right? Rules actually allow players and spectators the freedom to enjoy the game.

It’s counterintuitive, but true. Rules = freedom. 

Establishing spending rules, aka your budget, ultimately opens up new possibilities. Budgets don’t restrict you, they enable your long-term financial goals and free you from worry.

Check out these helpful strategies for building a budget that works for you.

Prioritize indulgences that fit your lifestyle.

As a reminder of how small purchases add up over time, we often hear this Starbucks example. Purchasing a daily cup of coffee costs you. If you eliminate the expense by choosing to brew coffee at home or fill your cup at the office, you can save hundreds of dollars over the course of a year. No argument here—specialty coffee is expensive. But what if that coffee—and the recipe you’ve perfected for the last several years—brings you joy every week? 

We’re here to say that maybe Starbucks should be a line item in your budget. This means you’ll need to cut something else out, but if your morning cup of coffee is an important part of your lifestyle, consider keeping it. Blanket statement budget ‘musts’ are somewhat of a farce. There are probably several other areas where you could limit spending that aren’t as valuable to you. What’s most important is making decisions that align with your financial goals. That doesn’t have to mean giving up your morning cup of coffee.

You can have what you want, just not all at once.

Don’t let a big dollar amount scare you away from adding a wishlist item to your budget. It may take time to save for the purchase, but if you’re saving money and adjusting other areas of spending to compensate, one day you’ll be able to afford the item or experience and enjoy it fully, without guilt or shame. A budget is a helpful calibration system that connects every cost so as you adjust one part, the other areas compensate in a manner that keeps you aligned towards your overall goals.

Look at barriers before and after setting your budget.

You’re probably aware of at least some financial limitations that could make your dreams difficult to achieve. After drafting an initial budget, more barriers are likely to emerge. That’s ok—actually, it’s really good. Wouldn’t you rather have a realistic picture of what you need to do to reach your goals rather than be surprised later on down the road? Budgets expose hurdles where they are so you can anticipate and overcome them.

A budget is a gauge, not a weapon.

It’s time for a perception shift on budgets! A budget acts as a map for starting out, and it provides direction after you lose your way. We’ve all been in the position where we spent a little too much one month. It’s easy to say, ‘Well, I already messed up this month so what’s one more purchase? I’ll just tighten up next month.’ If you don’t put real numbers to 1) how much you spent and 2) how much you need to save the following month to get back on track, it’s all too easy getting lost in a fog of ambiguity. Wouldn’t you rather face reality after one month of heavy spending instead of working through debt after a year or five? Course-correcting after a month is much more manageable.

For a couple, make it, work it, and celebrate it—together.

In our last blog, we offered tips on financial planning for couples. If you’re part of a couple, it’s important to build a budget together and check in often. How are each of you doing following the budget, and how well does the system work for your lifestyle? Any changes to the budget should be discussed as a team. And, remember to celebrate the wins together, too!

A solid budget is your ticket to freedom.