Community Magazine June 2014

54 COMMUNITY MAGAZINE Mesila presents... In Defense of Budgeting RABBI MAX ANTEBY "I think that it is dangerous to encourage people to live with a strict budget.When people have to record every penny they spend and constantly make sure they are staying within their predetermined budget, there will inevitably be tension in the home. Living with an exact budget is very restrictive, and it turns money into a major issue that can cause friction between husbands and wives and parents and children." We disagree. Our experience with hundreds of families has demonstrated conclusively that in homes that run with a budget, money is less of an issue than in homes where spending limits are only loosely defined. This should come as no surprise, really. It is axiomatic that structure creates freedom. For example, in a home where there are no rules or limits, are children happier? In a lawless society, is there less interpersonal conflict? Of course not. Both children and adults crave the security of knowing exactly what is acceptable and what is not. The need for clear limits applies to money matters just as it applies to all areas of life. In a home where budgetary limitations are not clearly defined, there is more room for disagreement and squabbles over how money is to be spent. When reasonable, predetermined spending limits are in place, however, people can spend money without fear of backlash from their loved ones – or from the bank. Yes, there is definitely a measure of discipline and self-control involved in living with a budget. But it is far healthier for spending restrictions to be imposed by an impartial, unemotional budget than by a husband, wife or parent. With a budget in place, there should be no financial power struggles. Instead of a husband, wife or parent having to say “no,” the budget becomes the authority that decides whether money is to be spent or not. When husband and wife (and possibly children, if they are old enough) decide ahead of time where they want their money to go, they are in effect eliminating possible sources of friction down the line. Once a year, or once every few months, when they readjust their budget, they can discuss how they might want to reallocate their spending. The rest of the time, money should be a non-issue. A home is in many ways similar to a small business. At Mesila, we advise businesses to view their finances as a cake. The last, and most important, piece of cake is the profits. Suppliers, employees, landlords, the government and others are all eager to get their hands on the cake before business owners can “eat” the profits. Unless business owners carefully plan for that last piece of cake, it will disappear quickly and they will be left holding an empty tray. The family finances cake also needs to be apportioned carefully so that it does not disappear. A smart parent knows better than to cut big pieces of cake for a few of the children and leave nothing for the rest; he or she will divide the cake in a way that ensures there will be enough for everyone. When one child begs for more than his or her share, the smart parent is able to say “no” firmly but lovingly, rather than shortsightedly give in and leave another child with only a tiny sliver. Similarly, the only way to divide the family’s income pie fairly and effectively is to do so ahead of time, setting aside money for basic expenses while allocating reasonable amounts for the needs of individual family members and the family as a whole. The smart parent will also make sure to leave a bit of cake over at the end. In the family budget, these are the “profits,” which might go to a savings plan or be used for something special – for instance, a family vacation. Of course, in order for a budget to contribute to the harmony in the home, it has to be realistic and somewhat flexible. If unbudgeted-for expenses continually arise, or if routine expenses consistently exceed their budgeted allotment, those are indications that the budget is too austere and needs to be reworked. A good budget is one that generously covers all essentials, leaves some room for non-essentials, makes provisions for unanticipated expenses, and incorporates savings in some form. This type of budget creates financial structure, takes the focus in the home off money issues, and contributes to an environment in which healthy family relationships can flourish. Mesila is a nonprofit organization dedicated to helping families and businesses in Israel, the US, Canada, and England achieve financial stability and independence. For further information please contact us at info@mesilainternational.orgs .