Yesterday in Part 1, I wrote about how people often resist the idea of living on a budget and how I used to be one of those people until I learned that a budget is the path to a wealthier, freer, and simpler life. Yesterday was about the big picture. It was about how budgeting has impacted my thinking and attitude. Today, I want to share a few of the more practical lessons I learned from the daily discipline of living on a budget.
Here are the first five items in this list. I’ll post the remaining five in Part 3 tomorrow.
1. $100 is a lot of money
I know that when I was a kid I thought $100 was a lot of money. I remember being in awe of a $100 bill. 
However, somewhere along the way, I lost my respect for the value for this sum of money. It didn’t matter whether it was an expense or income. I just didn’t feel like $100 mattered much.
Maybe it was because I usually didn’t physically see my money. I mainly used plastic cards instead of real cash. However, living on a budget and using cash has taught me to once again hold $100 in high regard.
It is amazing how far $100 goes and how much power it holds when you are in control of it and using it for a specific purpose.
2. Food tastes better when you eat out less often
My wife and I enjoy going out to eat. Before we had a budget, we went to restaurants all the time. It is a form of entertainment for us.
However, we were often less than excited about it. We had a hard time deciding where to go. We did it so often that it lost its feeling of being fun and special.
Once we saw what we were spending on eating out, we had to cut way back. The unexpected benefit is that now it has brought back the excitement of going out to eat. It is special again and the food just seems to taste better.
3. Shopping is not entertainment
When did going to the mall become America’s number one pastime? It seems that shopping is now the way people spend much of their free time.
Marketers do a fantastic job of selling us the lifestyles we think we want. However, after the buzz wears off, we are usually left with a feeling of emptiness and buyers remorse from our latest spending spree.
My budget has taught me to avoid going to the mall so I don’t fall into this trap.
4. Things can be fixed
We are a consumer culture. There is no question about it. We are misled into thinking that when something develops the tiniest of flaws that we should throw it away and go buy new.
Of course, retailers love this mentality. However, my budget taught me that this was stinking thinking.
Several months ago, the agitator in my washing machine wouldn’t turn anymore. I did a little research on the Internet and found the most likely cause was a $5 part that took me only 15 minutes to install. It has been working perfectly ever since.
I am not that much of a handyman, my wife would testify to this, but immediately assuming that something needs to be replaced when it breaks will only lead you to the poor house not to mention what it does to the environment.
5. Getting a true deal is exciting
America is the land of the sales flyer. How can retailers make money when they are seemingly always selling everything for 75% off? They jack up the initial price knowing that they will need to lower it later to make us feel like we are getting a good deal. >
Dave Ramsey suggests, “Never pay retail!” This has been my motto for the last couple of years. As Ron at The Wisdom Journal points out, it is possible to time the markets to get good deals. Timing is probably the single biggest advantage we have as buyers to get bargains.
In business, if you buy near the end of the month, year, or quarter salespeople are always more anxious to make a deal to boost their numbers. As an individual, I have sold several large items such as boats and cars at bargain prices when buyers had cash and were ready to make an immediate deal. Now that I have better control of my money, I hope to use this same technique to my advantage.
Living on a budget has changed my thinking for the better on several fronts. It is hard to understand how valuable budgeting really is financially and emotionally until you’ve done it for a significant period of time. As I stated yesterday, I’ll never live any other way. If you don’t have a budget, I hope this series of articles will inspire you to give it a try. I included links in Part 1 that can help you get started.
I’ll wrap this up tomorrow with a list of five more items. So far, it has been a great exercise for me reflecting on what I’ve learned. It really drives these lessons home.
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Hey Jeff, thanks for the link.
This was a great post btw. Living on a budget is just a habit and remember, good habits are hard to form but easy to live with. Bad habits are easy to form, but hard to live with.
@Ron – Hey, I like your comment that good habits are hard to form but easy to live with. That is so true! Why isn’t it the other way around?
Canadian here, I live just north of Toronto.I recently retired and now have the time for gardening. I am able to produce enough food for my wife and myself for the year in a garden plot measuring 25 feet by 25 feet in my back yard. I use a freezer and pressure canning as well as drying for preservation. I switched to ‘Ubuntu” software since my company no longer paid my way with Microsoft, and saved a bucket full of bucks(took some relearning though). I gave up my 35 mm film camera for .jpegs and ‘Gimp’ software, also free on the net and got the best bargain ever!If every American planted his southern lawn to potatoes they could make enough vodka to run their SUVs, or stay plastered enough not to care about rising price of oil – their call!
Great page, everything you said is true. The reason i know is i live by it. Its not what you make, its what you spend that can change your financial future.
keifer great comment & so very true.
You’re so right! When did shopping become entertainment? I still go to the store (we have London Drugs up here in Canada that has almost everything, electronics magazines etc.) out of boredom. I’ve got everything I need but I still go. I also feel that emptiness when I leave the store – maybe because I didn’t buy anything? Or because I wasted half an hour? I am praying that we have a renaissance and get our roller rinks back so I can go do something I enjoy for a few bucks rather than spend plenty more at the mall. We used to have 3 around the city – all went crumbling down to make way for Shopping centers and retail stores.
Hi,guy, great article on home finance philosophy. I am not a guy living on budget but spend i want, now i am suffering from it as the guy above mentioned that a good habit is hard to form but easy to live with but, bad habit is easy to form but hard to live with.
Thanks for your great article and i will try to practise it.
I couldn’t agree more on the “shopping” and “Eating out” points. We used to go to restaurants all the time, but it isn’t that special. In fact you get bored easily. It’s much better to eat a home, for more than a few reasons. It saves money and tends to be healthier too! Plus being a raw vegan/vegetarian can be a tough thing to cater to at restaurants.
I hate that shopping has become a hobby. My mom & I couldn’t spend time together if we weren’t shopping. I realized it, but my mom still wanted to go shopping together. I’m sorry, but I prefer to spend my time talking and hanging out than being wacked by advertisements the whole afternoon.
Read Nathalie Lussier from Billionaire Woman’s lastest article – Link Love – Gratitude for Finances and Life
Being a vegetarian, my choices on a menu were quite limited. Therefore, we ended up having almost the same stuff every time we dined out as a family. We realized that soon and now its more fun to eat at home. Either-ways, I feel that dining out is for the ‘experience’ than the food itself. And any ‘experience’ loses its luster if it becomes all too frequent. Rare pleasures are meant to be just that -rare.
You hit the nail on the head, so to speak. I enjoyed your article and look forward to reading the rest of it. I will be back. I am a diary farmer in the Ozarks of Mo and have always had to budget my funds. It has been years since I had a trip to the mall. I invite you to visit my blog about dairy farming, gardening etc at http://www.musecrafters.com/kelleysdairy
Cheerily
IJK
Yes, shopping is NOT entertainment! Please inform the masses!
Shopping also makes you fat. Just go look around in the malls for the proof!
Read The Fitness Diva’s lastest article – The Web Diva
I could not agree more.
I learned all of those things the hard way, especially shopping not being entertainment!!!
Fabulously Broke in the City
Just a girl trying to find a balance between being a Shopaholic and a Saver…
Read Fabulously Broke´s latest article – FB Picture Folder Meme
I remember when I had to live on a budget. It sucks.
I LOVE saving money and living within a budget. Its true freedom.
Let me predict the future. Dec 31, 2009 Jeff Nickles most popular new article: “Now That I Have an Abundance, I still Appreciate the Things I Learned While Living On a Budget”
Read Jonathan – Advanced Life Skills´s latest article – 7 Traits of Highly Confident People
Thank you promoting living on a budget. I have done all of my life and have taught my children to do the same. To me, a budget is not a restraint, but real freedom to know what I CAN afford.
Two more years and my home will be paid for in full. It will take me a total of seven years to do it, but it will be well worth it.
My neighbors think I’m ‘rich’, far from it, I just know my income and live well below it. Easy. I cannot understand why I cannot convert more to the budget or spending plan way of life, but some folks just like being broke. That I will never understand.
Great post!
Since short I forced myself into a weird budget. There is no budget involved actually. It works like this: I try to spend nothing and repeat this every day. If something isn’t necessary right at this moment I won’t buy it. I try to keep my money. It’s just easy as that.
If I see a book that I want, for example, I do the following: even if I have the money, I decide to buy it from new money. So without spending the money I already have. This sounds weird but it gives me the feeling that I earned the book, that I saved money for it. If you remember a time were you save your allowances for something special, you know the special feeling you have for it. You enjoy it more and you take more care of it. This is the feeling I have now when I decide to buy something from the money I don’t already have.
It’s buy the way a good to let the habit go to buy something what you don’t need just to impress people who you don’t even like. Once you see how ridiculous this is, you can immediately save a big amount of money.
Once you made a habit of letting things go you will see how it enriches your life. Who do you think is the richer person? The millionaire who is lying awake in bed, staring at the ceiling and thinking if tomorrow is the day where he loses it all or the guy who sleeps well and looks forward to a new happy day, even though his bank statement declares him poor?
Think about it.
The more I let go the freer I feel. Many may think different, but most of the time I consider myself one of the richest people on this planets surface. Even without brand clothes and shoes.
Have a nice day and keep up the good work, Jeff.
Mario
Read Mario´s latest article – Are You Owning Your Things Or Are They Owning You?
Living on a budget is not too bad with a dollar store nearby lol..
Read Melody´s latest article – Logo Design Process for Trudy Thomas
This is a great article! Eating out is the big money sink…LEARN TO COOK folks. Everyone can do it, we’ve been doing it for 30,000 years. No excuses. (And guys, learning to cook will get you more attention from the ladies then a fancy car ever can. You can’t eat a Mercedes.)
I totally agree! Finding a great deal, a bargain is really exciting! And then, paying in cash makes you really aware of how much you spend!