I am so tired of the "No Pain, No Gain!" mantra and the wrong-headed implication that people should seek "more pain" in order to guarantee "more/better gain."
When it comes to your spending decisions, you really can have your cake and eat it, too (with some important caveats)!
A recent article from the MintLife Blog ("The American Family Budget - A Partner's Point of View") is an example of the WRONG way. While I appreciate that it is important to have BOTH partners working together on family spending, I disagree with the assumption that the process has to be painful or that one partner can/should abdicate to the other any sense of control about their financial choices.
If THIS is what the American Family Budget is really all about - it should be taken out back and shot.
THE SACRIFICE FALLACY
I don't like the word, "budget." A "budget" is like a "diet." It's a six-letter-long four letter word. To most people, a budget means pain, sacrifice and self discipline.
It shouldn't be that way, but it is. That is what I call "The Sacrifice Fallacy" and because of it, most budgets fail (and fail miserably).
While budgets have a bad rap, making better spending decisions is GOOD and desirable. Developing that "control" doesn't have to mean your quality of life is diminished. In fact, when it is done correctly, making good money choices means improving your quality of life both now and in the future.
THE PARTNER'S PERSPECTIVE
Traditional budgets imply that one person "keeps" the budget and their partner should follow along and toe the line. The MintLife blog article tries to address how this partner feels about that kind of arrangement.
The natural conclusion of the traditional budget approach is that spending decisions are made based on whether or not "it's in the budget." Since the dominant partner created that budget in the first place, they dictate through the budget how their partner must act.
I've been married 22+ years and that "command and control" approach would seem like a recipe for disaster. Nobody likes being told what to do - especially from their spouse.
If a cash flow system is going to work, it has to keep the playing field level and leave all participants working together toward a mutually agreeable and positive end result. Both factors are important.
When each partner feels empowered and in control, they stay positively engaged. They also support each other through the process which makes their relationship stronger and more productive.
When cash flow management is done correctly, money choices are made based on the Substitution and Value Question, not the Sacrifice Fallacy:
"I can only spend this money once - so am I/we getting good value here or could I/we do better by using this money someplace else?"
That is the question every family member should be asking themselves as they swipe their credit card, write a check or even pull cash out of their wallet.
It's not about whether it's in the budget. That's a question of sacrifice - I have to give up something I want because of an arbitrarily defined limitation. It IS all about using limited resources to have as much of what's really important to me/us as possible.
It's time to decomission the budget police and embrace Cash Flow Management instead.
"No pain, no gain" may work when you're at the gym, but pain, sacrifice and self discipline have no place in personal finances. That will lead to animosity, impulsive and wasteful spending and possibly a marital dissolution (after all, money is the primary cause of divorce), not to a better quality of life.
The next time you see an article talking about a "budget," know that when it comes to family matters (government and business are different) there is a better way. You CAN have your cake and eat it, too. You can make better financial decisions AND enjoy a better quality of life - no pain, sacrifice or self-discipline required.
That's something I think your partner can embrace.
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