When One Size Doesn’t Fit All When Budgeting

October 12, 2021

As an avid sports fan, I like to wear hats from my favorite teams.  I’ve never been a fan of one-size-fits-all hats.  They’re stretchy and often lose their shape.  I would much rather spend the extra money on a fitted hat that I know will fit like a glove, and I’ll look forward to wearing it all the time – it’ worth it.  Hats are sold in quarter-inch diameter increases, so it’s very easy to get a hat that fits just right.  One-size-fits-all just doesn’t cut it.

And yet, people often take a one-size-fits-all approach to something much more impactful in their life:  Budgeting.

I’m often asked, “how much should I spend on *insert item here*?”  My answer is almost always, “it depends!”  Which is, of course, the last answer anyone wants to hear.

But shouldn’t it depend?  What works for one individual might not work for another – and that’s ok!

Priorities Matter

If you’re a homebody, you wouldn’t want to spend a large portion of disposable income on going out to dinner or events, and you might want to spend more on an apartment or home purchase that you’ll use and enjoy.  The opposite is true if you’re someone who doesn’t like spending time at home.  Why spend all this money on rent or a mortgage when you don’t think you’re going to want to spend most of your time at your home?  What you prioritize matters.  Your lifestyle matters.  Your preferences matter.

The first result of a google search for “budgeting” might give you a good guideline, but it won’t provide a one-size-fits-all answer on how to budget.  Following arbitrary rules as to how much is too much to spend on one area of your life can lead to being unsure of yourself when your numbers don’t line up with theirs, feeling guilty that you overspent one month, and ultimately not be able to enjoy what you’re spending your money on.  Who wants to feel anxiety when spending money on something they enjoy?

The Numbers Matter

Of course, the numbers matter too.  You don’t want to find yourself living beyond your means and struggling financially.  Focusing on long-term goals like retirement is also important.  But far too often, people only focus on the numbers.  Finances are part art, part science.  Understanding yourself and your priorities in life can do wonders for your relationship with your finances.  Your spending vs. saving dynamic is going to differ month to month.  Opportunities in life don’t present themselves uniformly, and they don’t follow a traditional budget.  Splurging on something that improves your quality of life should not be viewed negatively or as a setback — everything in moderation, with occasional excess.

At BDF, we pride ourselves on putting context behind the numbers to help everyone we connect with live a full life.  You should enjoy spending on things that are meaningful to you, even if that means putting off saving towards a financial goal one month.  Life only happens once.  Live it to the fullest.