Typical money management advice has a fatal flaw: It starts with budgeting. Here’s a new way to think, teach and talk about money.
Budgeting is diet culture for your money
It’s not hard to draw the line between a dieting regimen and a budgeting regimen. Both adhere to a set of rules to limit behaviors the creator deems harmful, generally to override your natural instincts. Dieting restricts eating; budgeting restricts spending.
What we don’t do often enough is draw that same line between the cultural paradigms these protocols support.
The phenomenon of diet culture is well-documented among medical professionals, journalists and academics interested in food and bodies.
Diet culture is a system of beliefs that, as registered dietitian and author of Anti-Diet, Christy Harrison, explains, “worships thinness … promotes weight loss as a means of attaining higher status … demonizes certain ways of eating while elevating others … [and] oppresses people who don’t match up with its supposed picture of ‘health.’” Harrison notes that diet culture “disproportionately harms women, femmes, trans folks, people in larger bodies, people of color, and people with disabilities.”
I recognize a similar phenomenon in personal finance: budget culture.
In parallel to Harrison’s diet culture explanation: Budget culture is a system of beliefs that worships wealth, promotes debt elimination as a means of attaining a higher status, demonizes certain ways of spending while elevating others and oppresses people who don’t match up with its supposed picture of financial health.
Budget culture is the prevailing way we think, teach and talk about money that relies on restriction, shame and greed. Just as dieting is to diet culture, the act of budgeting is the calling card of this cultural stance, but the mindset pervades every decision we make about how to earn and use money, regardless of whether we keep an explicit budget or not.
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You don’t need a budget
Nearly every financial education, advising or coaching program starts with making a budget, because that’s what most of us were taught. But we’re not helping anyone by falling back on this harmful trope.
Just like diets, budgets encourage restriction and rely on discipline, which makes them unsustainable at best and harmful at worst. A restrictive mindset around money can lead to a lifetime of fear, judgment and scarcity thinking that harms a person’s financial and mental health in the long term.
And — unsurprisingly — like diets, budgets don’t work.
An analysis of multiple research papers and studies by the Association for Consumer Research at the University of Minnesota Duluth found budgeting to have little or no net positive effect on finances. And it found that budgeting reduces the enjoyment people have when spending, especially for those already facing financial constraints.
Advising clients and students to start with a budget sets them up for a lifetime of failed attempts — or, worse, for the overachievers, a lifetime of painful restriction.
Budget-free money management
Doing away with the budget sounds radical and scary to a lot of people. That’s because all we’ve learned about money is through a budget culture lens. We’re convinced we don’t know how to manage money without applying a set of restrictions.
So, how do you guide clients and students through a rejection of budgeting and teach them to trust themselves to manage money without ruining their lives?
Managing money in a satisfying and productive way without the constraints of budget culture means seeing the fluidity and nuances of money. Talk about these four areas of money with clients to help them gain a deeper understanding and a healthier relationship with money:
- Resources. We don’t have to rely solely on “hard work” to provide for ourselves. Recognize the value of resources such as community support, government benefits and credit and loans to meet your needs, and choose work that’s joyful and meaningful.
- Commitments. Understand common living expenses as choices we make and, therefore, choices we can uncommit from anytime. No financial commitment is an unchangeable obligation.
- Goals. Ask why before committing to a set of goals laid out in any financial plan. Debt payoff doesn’t have to be a top priority, and investing isn’t inevitable. Instead of adhering to someone else’s plan, we can investigate our options and make the money moves that support the experience we want.
- Spending. There’s no such thing as “wants vs. needs.” Spending is morally neutral. Restrictive spending won’t overcome the systemic and personal forces behind our financial challenges.
Reject financial advice mired in budget culture restriction, shame and greed. Instead, serve clients with a new kind of conversation about money that teaches them to trust themselves and experience the life they want.
