"Realistic budgeting" is a phrase that’s going to mean different things to different people, it’s even going to mean different things to the same people at different points in time.
There are two key questions involved in conceptualizing what a realistic budget would look like for you.
What is budgeting?
What is realistic?
So, the first question... Budgets are generally a visual display of expected income and expense for a given period of time. Like many people, I think of budgeting as a tool. You use it to accomplish something. Now, budgeting has the sort of connotation of being about savings or retirement or getting rich or wealthy. To oversimplify, these are just prominent goals that people have sought to accomplish, goals we place social value on accomplishing.
These are far from the only goals we can accomplish using budgeting, however. From all our daily tasks to the tasks we delegate to others, from studying or cooking to city planning or running for office, an understanding of budgeting is essential. Budgeting can apply to almost everything we do, because money and the purchasing or spending of goods or labor is involved in almost everything we do.
Regarding the second question... “What is realistic?” This is a tough one, especially when it comes to budgeting.
When I was younger, I was a student representative on a committee for high school reform, and the facilitator asked us all to write down what we wanted the school district to be like in ten years (or five, I can’t recall--this was over ten years ago now). Many people said things like “a computer for every student in every classroom,” all sorts of huge dreams which, to my mind, were unattainable within ten years without a miracle: our school district showed no sign of escaping from bankruptcy anytime soon.
So, when it was my turn, I said, “I would have to study the budget first.” “No, no,” I was told, I didn’t understand the exercise. “Imagine what the district could look like in ten years.” In the weeks that followed, most meetings consisted of listening to officials say that we were only supposed to be creating a framework for how to improve our high schools. We never tied it back into our shared dreams, or how we could actually work to get there.
Wishing and dreaming are good, very important, but when setting a timeframe, follow the advice of so many brilliant people: break it down into small, manageable tasks, and give yourself realistic deadlines to complete them. The same holds true for budgeting. If it will motivate you to work towards it, by all means, write out your ideal budget, but also write out what your current budget is, what it has been for the last couple months: what money have you earned or received and what money have you spent or saved.
Starting out, meet yourself where you’re at; expect yourself to do what you have been doing, see where things might need to be adjusted to get to that dream budget, and gradually shift course so you will get where you want to go.
Early access originally posted on July 9 for $5+ patrons; post was made public July 22.