There are a few (well maybe more than a few) commonly accepted personal financial management concepts that actually help fuel money stress, rather than minimize it. Budget is one of those concepts. If your concept of budget is something that you use to determine how much of the money you have goes to what purposes, then you are trying to put your money in a box. When you do this, you automatically adopt a very restricted attitude about what you can and cannot do with your money. This will in turn reinforce scarcity and lack because every time you are spending money, you will be evaluating the decision against whether you have enough available in the budget to buy the thing you want to buy. This might sound prudent, and obviously a balanced budget is prudent, and not spending money you do not have in the budget is also good financial management. The problem is created when you make your analysis based on running out of money in that budget category.

This is also the reason why the accumulation model of retirement actually creates the fear of running out of money. If you have an attitude of ‘I might run out’ because you essentially are looking at your money as though it is a funnel running out the bottom, you will make your decisions from the perspective of ‘will I have enough and I better add more to the top so I don’t run out’. With the conventional concept of budget, every time you spend money, you are evaluating your decision based on the ‘will I have enough’ model, and therefore constantly reinforcing fear and scarcity. Instead, you need to adopt the attitude of ‘earn more than you spend’ rather than spend less than you earn and you will be reinforcing a world of possibilities and confidence in your ability for your financial decisions to meet your needs.