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The Five Stages of Budgeting Grief

Many of you may have heard about the five stages of grief. But what does this have to do with budgeting, you ask? I have a confession to make, I DON’T REALLY BUDGET. When I started thinking about why, there were a lot of feelings and emotions that came up. While I don’t yet have all the answers, I hope this post (and I) can be some help to you as you work through your emotional responses to budgeting and get to the place that you want to be with your finances.

Denial – I don’t need a budget.

Here’s how I used to “budget” – EARN MORE INCOME. Every time I got a raise, I spent more. Every time I got a bonus, I took a trip. I didn’t need a budget because I loved figuring out how to increase my spending to match my income. I was a master at forecasting my cash flow so that I knew how much I could spend and also pay the bills. Think about how you manage your money today if you don’t budget. Does it get you where you want to be financially? Do you not even want to know that you spend 25% of your take home income on eating out and buying shoes?

Anger – I don’t want some stupid budget telling me what I can and cannot spend.

Once you get past denial, you get mad at your money. Maybe it’s because you don’t have enough of it to do everything you want. Maybe it’s because someone else has more than you do, and you want to spend like them. Maybe it’s because the thought of being held to a certain dollar amount for a certain activity like shopping or eating out makes you feel like life is unfair. You think that a budget is going to make your life worse on a daily basis. Who made the rule that you need to save 15% of your income to be able to retire some day? Who says you can’t buy that house with the mortgage that’s 40% of your income? Why is your spending anyone else’s business?

Bargaining – I can buy these shoes today because they are on sale.

So then you start rationalizing. If I save this amount on coffee today, I can go out over the weekend. Or maybe you think “I’ve been so good this week, I deserve a splurge”. Whether you look at spending as a carrot or a reward, it’s likely the plusses and minuses aren’t getting you ahead in your financial goals. If only you hadn’t spent all that money on the kids at Christmas, you could afford to go on a family vacation. If only you hadn’t been laid off, you would still have some savings. Regardless of the mind games you play with yourself, your reality is what it is. The beauty about money is that the dollar amounts don’t lie. You can’t bargain your kids into college or bargain yourself into a secure retirement.

Depression – What’s the point of budgeting?

Then you realize that becoming financially fit and sound will require some sacrifice and prioritization and it all seems too much. It may seem like you will never stop living paycheck to paycheck, pay off your student loans, become mortgage free, or be able to quit your job working for the man to follow your dreams. Do you think that everyone else has the secret sauce and you are the only one struggling? They don’t. You aren’t. This stuff is hard work that not everyone wants to do. You may feel isolated if you can’t go out with your friends. You may want your kids to have the best of everything because you didn’t, and feel bad if you can’t give it to them.

Acceptance – I need a budget.

You’ve finally figured out that you are an adult. Maybe you now have a couple of kids, a mortgage, a job, and a retirement plan. You are entering a critical time in your life that are your prime earning years, and these years also give you the opportunity to overspend on activities, material possessions, or unplanned circumstances. Instead of being confining, your budget is actually your ticket to freedom and peace. It will help you figure out how much you need to save to make a big change like switching careers, helping your kids with college, or moving across the country to be closer to family. It will help you plan for making memories today that will be with you forever. It will help you minimize worrying about the future – whether it’s next month, or 20 years down the road, and build a new relationship with money.


I totally get that spending is emotional. You may go through all of these stages in order, feel them all at once, or go back and forth over time. It’s incredibly personal. More so than your job or net worth, your spending can really reflect who you are, how you feel about money, and what you value. My job is not to judge you. It’s to meet you at whatever stage you are at and figure out how to get you to Acceptance. I might even get there one day myself.