Simple Budgeting Habits
How Culture Creates Our Spending Habits
Oh NO! The “B” word!
We have all been there at some point, and honestly, most of us still are. Budgeting our expenses tends to be an emotional rollercoaster for each of us. Why is it that we tend to either struggle with something that seems so simple or deny we have a problem altogether? Honestly, we all have similar struggles with budgeting, and understanding our similarities can lead us to feel more relatable to each other.
First of all, this is definitely NOT going to be one of those articles telling you how to budget, promising you endless riches, or even a book summary by many of the greats around budgeting. Instead, this article will indicate how your cultural disposition affects how you make money decisions. I will also share some healthy and applicable action steps that may be valuable to you.
Lastly, I will provide a few ideas on how I handle my own budget for some applicable takeaways that you can use on your own!
INDIVIDUALISM
First, it is necessary to define Individualism.
“Individualism focuses on human independence and freedom. It is generally against external interferences regarding personal choices (Brown, 2021).”
This is key for us to consider as our tendencies as individuals inside this cultural group tend to make us focus on “me.” “Individuals are independent of one another. Individualistic people prefer loose social networks and are expected to look after themselves and their immediate families only (Czarnecka, 2020, para. 14). When you look at the definitions above surrounding individualism it isn’t hard to draw conclusions between the definitions and where we live. If you have some previous background most Western countries tend to fall into this category.
What’s interesting about this group is that individualistic consumers are also those who are more concerned with brandishing their competitive nature against others inside this group. You have seen this all the time with coworkers and friends who seem to be always competing for attention through brand-affiliated merchandise and the latest fashion or technology on the market. An easy example is how the cell phone industry has worked to create die-hard loyalists. Just look at how Apple and Android have induced some of the craziest trends for consumers to buy the latest and greatest.
Because of the drive to compete as an individualistic consumer, your budget will follow suit with how your drive to consume is directed. This definitely is not to say you are going to be broke. However, when cash is limited and you find yourself in this category be careful of those credit card swipes. Because of our “buy now, pay it back later” payment options for this camp it is essential to be wary of this consumer trap.
HEALTHY ACTION STEPS
Here is a quick list of some actionable steps you can take if you find yourself in this category:
- Appropriately set your budget according to your values and principles
- Be kind to yourself
- Set your budget early
- Review your budget often
- Ensure your income is appropriate for your lifestyle
Although these seem like no-brainers, they are much more challenging than they appear. Set your budget appropriately if you are going to be the kind of consumer who needs/wants to have the latest and greatest. It’s your budget, and no one can tell you otherwise. In other words, set up your budget according to your values and principles if they are aligned for those items. Be careful not to devalue yourself. You are not horrible or materialistic if you want to live that way. It is all too common for others to try to influence our choices because it is different from what they would prefer. Nobody can change or take away your right to live the way you want.
Setting a budget early and reviewing it will help you know your income level. Take advantage of the upcoming paychecks to prepare for big sales at your favorite store. Prepare by getting other priorities in order ahead of time. You might also need to find ways to make cuts in other areas. It can be really frustrating to spend $300 on a new item and then forget that your cell phone bill is due next week, a week before payday.
COLLECTIVISM
The other consumer category to consider is the collectivistic group. Let’s get a solid definition here before we begin.
“Collectivism is the principle or practice of prioritizing group cohesion over individual pursuits. It views long-term relationships as essential since it promotes group goals. The people in a collectivist society can easily sacrifice their individual benefits for the sake of the whole society’s progress (Brown, 2021).”
I understand that this may sound incredibly idealistic, and it does seem to give off this impression. Common themes among members of this group are related to the political theory of communism. To be clear, that isn’t necessarily a bad relationship based on how it is used in consumer spending habits. Collectivists are we-oriented, and group membership is fundamental to their identity. They prefer tight social networks, and they are expected to take care of their immediate families and their relatives, clans, or other members of the group (Czarnecka, 2020, para. 14).
Group members tend to sacrifice themselves more for the good of the group/society. It isn’t necessarily wrong when you think about how families are set up and function. This group tends to be more concerned about how their spending affects others in their group. In married households, we often see some consumer behavior from at least one spouse, where one is more frugal while the other is a bigger spender. There is no real surprise that collectivistic consumers are more likely to focus on immediate needs instead of wants and desires.
However, this does not mean that collectivistic consumers are better than individualistic. Collective consumers are less likely to treat themselves well and find little pleasures or “rewards” due to their efforts. Having this attitude can be equally harmful as being a spendthrift. The key is to keep things in moderation.
The primary blind spot of most collectivistic consumers is that they value their in-group and don’t engage well with individuals outside their in-group. These tend to be more traditional consumers, and it’s no secret that most eastern cultures tend to be like this. Thus, if you find yourself struggling against your natural predispositions, feel assured that everyone is working in their own way.
HEALTHY ACTION STEPS
Just like before let us establish a few actionable steps if you find yourself in this category.
- Avoid turning your budget into an idol
- Don’t be afraid to reward yourself
- Find ways to budget in things that your counterpart wants
- Avoid becoming a hoarder
- Learn to healthy budget for investments that may be riskier than you think they may be
Consumers with collectivistic attitudes often only think about their basic needs. For example, groceries, clothes, and gas. Of course, these are essential things. But life is about living. In other words, if you are incapable of rewarding yourself, your life is leading you rather than you directing your life. If your partner tends to be more individualistic or has more wants than you, then find ways to accommodate them within the budget. That is why creating and reviewing a budget is crucial.
One should avoid being a hardliner and hoarding money for no good reason or purpose. There are always ways to earn more money. If you are just “saving up” without a clear goal in mind, then I encourage you to find a way to turn that idol into an opportunity to serve others. Giving back to others, being charitable, and making your money work for you are all critical.
IMPORTANT CONCLUSIONS
Here is the critical part. No matter which category or camp you fall into, you’re not terrible. Contrary to popular opinion, everyone makes impulse purchases from time to time, and no group is better or worse than the other. Each camp has unique strengths and weaknesses. Individualistic consumers tend to have more extensive and meaningful dreams than collectivistic consumers who play it safe. Collective consumers tend to save for emergencies and play the long game more than individualistic consumers. No matter which camp you belong to, you are crucial for the global economy.
Earlier, I said I would share some tips and tricks for budgeting, so here are a few resources, links, and ideas I have instituted that I believe may be helpful to you all.
DIGITAL PLANNER + BUDGET
As a big fan of digital budgets, my iPad is my largest resource, as it holds my class schedule, business plan, and home budget. My digital planner on my iPad contains everything I need to organize my life. If you have access to an iPad, then I definitely encourage you to get a digital planner that works for you. Here are a few of my favorite Etsy shops I purchase from when I need a tool to keep me organized.
COPILOT MONEY APP
My life was changed by this app. Over the years, my wife and I have discussed budgeting software (and I have used a LOT of them) and how we can easily sync up and stay on top of our spending. My experience with Copilot has been excellent. Honestly, just keeping everything synced up and putting transactions into categories has kept things pretty simple. The market is full of incredible apps, I’m sure. But this one, so far, has made my life a whole lot easier.
MONEYDANCE
Many people simply need a more robust budgeting software that works similarly to what they are used to. MoneyDance was introduced to me by my Mentor, and it has also changed the game for me as it provides a much more comprehensive view of our finances. I don’t use it as often as I used to since I find Copilot to be a better solution for keeping my wife and me organized, motivated, and focused on finances. However, for the four years, I used it, it was excellent. For those who want something similar to QuickBooks but without the cost, this is definitely something they should check out.
I could go on and on about all the items I have used. The important thing is to create a system that works for you and your family and keeps you organized and focused!
Here is another article you can use to learn more about other budgeting systems and ideas that are out there. I particularly enjoyed this article by Yi Shun Lai as it stresses the importance of a system that works for her.
Additionally, here’s another fantastic article by Zaid K. Dahhaj that stresses the importance of tracking and why it is vital to your overall success for budgeting.
QUOTE OF ENCOURAGEMENT
References:
Brown, g. (2021, July 30). Difference Between Collectivism and Individualism. Difference Between Similar Terms and Objects. http://www.differencebetween.net/miscellaneous/difference-between-collectivism-and-individualism/.
Czarnecka, B, Schivinski, B, Keles, S. How values of individualism and collectivism influence impulsive buying and money budgeting: the mediating role of acculturation to global consumer culture. J Consumer Behav. 2020; 19: 505– 522. https://doi-org.ezproxy.liberty.edu/10.1002/cb.1833
