Ramit Sethi argues that budgets create guilt and restriction without real insight. Tracking every expense in spreadsheets takes hours but won't tell you if you can afford a vacation. Most people budget for false control, not to actually improve their lives.
In my opinion, here's why budgets fail. They're based on restriction and guilt. You set these arbitrary numbers, $200 for groceries, $50 for entertainment, and then you feel like a moral failure every time you go over them. And what's worse, you have to laboriously track these numbers. You look at this massive spreadsheet and what does it tell you? Oh, I guess I spent that much last month. Does it tell you when you can take a vacation? Here is how a budget sounds. Uh, make sure you track every single thing that you spend. I want you to spend at least 2 hours a month recategorizing and moving things into different categories. Now you have this extremely complicated spreadsheet. Some of the cells are red, some of them are green. Here you go. P.S., you have to do this for the rest of your life. When you look at that budget, what does it tell you? Do you know how many people I've spoken to on my podcast who spend hours every single week with their budget? And then I ask them, what does this tell you? And they go, I don't know. I go, why are you doing this? They go, I don't know, I thought you're supposed to. I go, no, why are you doing it? And it almost always turns out they're doing it because it gives them a sense of control. Guys, I don't want you to feel a sense of control. I want you to live a rich life.
