Budgeting Your Money Properly

baseline budget

Why Money Is Funny These Days

Keeping your money in your pocket is really hard these days, specifically because of three main things: horrible inflation, reduced incomes and predatory marketing practices. We have to get into all three of these subjects so we can understand just why budgets are such a critical part of our lives and why we are encouraged to maintain a budget (https://www.britannica.com/topic/budget) to survive in this world, the world we did not ask to be born into. Every other creature that exists on this earth is born and gets to live somewhere and eat food without having to pay for those things. We are the only species on this planet who has to pay for shelter and food instead of finding cooperative ways to share, so it can be really difficult to convey this to your children while also encouraging them to want the best for themselves.

Budgets can be really difficult to put together if you are not accustomed to making them, especially if you have been existing in a space where your income matches the price of things and you are not the victim of constant marketing. But where does that place exist? Even in the Nordic countries where they always say folks are paid well and the pricing does not gouge them because they have so much income and also so much social and economic support, people are still the recipients of various marketing campaigns that encourage them to spend instead of saving, and as a result, budgets can be really shockingly poor in the face of all that you want to own instead of all that you need to own.

Inflation Is Really Tough

You can find yourself absolutely shocked by the inflation we are currently experiencing all over the world. Here in the United States of America we are not the only people experiencing very expensive prices these days even though people will act like we are the only ones struggling with high prices. We have heard that climate change effects are so bad in India that mangoes are the size of grapes, and so as a result, people are unable to afford paying for basic things if they are farmers. These are the examples of supply chain issues that can get in the way of products making those products more expensive as people continue to look for them. If mangoes are the size of grapes, those can only be marketed if they are delicious as well, but as everyone who enjoys mangoes know, they are pretty sour unless they are fully grown.

Therefore when we think about the inevitability of inflation, we have to remember that inflations and recessions are part of the natural economic cycle. This current cycle is definitely happening as a result of a combination of factors: climate change, the pandemic and corporate greed. If all the ultra-wealthy people on the planet decided to live modestly for merely a few years, those profits might have been distributed more equitably among the rest of us, but as we know of the billionaires here in America, that was not going to happen. You will have to exercise some discretion to learn more about how your money can be properly distributed in order to make you more money or at least keep you afloat over the years.

As a result, the prices are very high and so we need to make those budgets for ourselves to makes sure we can continue to survive in such a very expensive social and economic climate. The worst thing about this inflation experience is that prices do not go down and if they do, most companies do not pass the savings back onto the customer. So for example, there are many companies that are keeping things the same price but they are severely reducing the product size or quantity that the customer gets for each purchase. Therefore even if the price remains the same in your budget, you are getting much less for your money, and so you may not even realize the ways in which your budget has been adjusted without your full knowledge.

Income Reduction Is Rough

The second issue you will have to experience is reduced incomes. Have you thought about how much easier our parents had it in the United States of America many decades ago, financially? Sure, things may have been more difficult for them regarding racism and sexism, but the amount they could save towards their baseline budget was going to be so much more simply because they could actually earn more money over the years. It is so difficult to think about it for people who are in the baby boomer generation because they think we younger folks are complaining for no reason, thinking their lives were inevitably more difficult. Image

However, our parents were able to budget in a much easier manner because they were able to make more space for discretionary purchases without even realizing it! They did not even recognize how much purchasing power they had relative to younger people that are out and about today. They would be shocked to know that five dollars in their money many years ago would easily purchase over thirty dollars’ worth of goods today, so their ability to make budgets from then to now would require them to rethink just how much the world has changed over time. Do you think your mother or father would be willing to consider just how much easier they had it, or do you think they would still say that your life is easier than theirs?

When we think about this type of thinking, we have to recognize that this is teleological thinking, which is assuming that things will inevitably get better as time goes by. That assumption is one that can really get in our way, which is why so many older people give younger people terrible economic advice. This is why you have to look carefully at your budget and plan it meticulously!

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By 12disruptors Admin

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