Dave Ramsey: The ‘Totally Wrong’ Reason Why People Don’t Do a Budget

©Dave Ramsey

There’s a reason why not everyone uses a budget. Money expert Dave Ramsey tweeted on July 26 that many people would rather have a root canal than set a budget or even read a book on budgeting.

The Straitjacket View of Budgets

Having a budget, for many, has a straitjacket connotation. Ramsey tweeted that many people see a budget as something restrictive that binds them up and takes away all their choices.

This is the wrong way to view a budget or any cash flow plan. The better approach is to view a budget using Ramsey’s pizza example.

“Having a budget doesn’t mean you can’t order a pizza when you want one,” he tweeted. “It just means that you have a plan for your money. If you like pizza that much, then put a pizza line on your budget.”

Make Your Money Work for You

Why Should You Have a Budget?

You may be further persuaded to start budgeting and embrace this good money habit thanks to some reasons offered up by Ramsey Solutions.

  • Budgeting creates a plan for your money. What kinds of financial goals do you have for the future? Whether you want to save for retirement, buy a house or pay off debt, budgeting helps you establish a plan for your hard-earned dollars and reach your financial goals.
  • A budget puts you in control. Without a budget, it’s easy to feel like money is happening to you and in an uncontrollable manner, like thinking you’ll always be in debt or live paycheck to paycheck. Once you have a budget, you’re able to control the money coming in and going out every month. 
  • You can spend and save with a budget. This is where the belief a budget is restrictive doesn’t check out. Once you know you’re able to cover all the expenses in your budget and set some money into savings, you can put some money toward fun things in your budget’s personal spending line. Best of all, you don’t have to feel guilty because you budgeted carefully for these purchases.

As Ramsey tweeted, “It’s your money. I don’t care what you do with it; I just want you to do it on purpose!”

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