Ditch Black and White and Embrace the Gray

I like rules. Give me lists, codes, the exact equation. Tell me what to do step-by-step. I want the handbook, instruction manual, and text book. I will read them all cover to cover and take notes. I think that’s why math and science are my jam. Proven rules that work every time? Yes please.

But sadly for me, most things in life don’t come with a recipe or handbook. Those of us black-and-white thinkers must learn to balance the science with art.

Quotes from my mother appear frequently here on my little corner of the webernet, so here’s another fitting one she says often: “Stay flexible and you won’t get bent out of shape.” Ah, Mom, you’ve done it again, you wise sage.

If we don’t learn to operate in the gray areas, our systems will inevitably break down.

So when it comes to budgeting money, instead of hard and firm rules, I have had to learn how to impose guardrails.

Guardrails. An appropriate rebranding of sorts. Here is my upper boundary, here’s my lower boundary, and here’s the area I can stay within.

Isn’t that what a budget is meant to be? To provide freedom inside of boundaries rather than assigning, constraining, and limiting every single dollar?

I used to slip into that negative, scarcity focused, black-and-white mindset in my budgeting. Thinking that over-organizing would prevent any and all chaos. What this false control resulted in was smothered freedom. And it wasn’t until I changed that mindset that I really felt freedom in my finances.

Allocating every single dollar sounds great in theory. You “give every dollar a job.” It’s solid advice conceptually, but in practice that kind of rigidity will often leave you with a busted budget and broken spirits.

When I budgeted $50 to my water expense and the bill showed up as $80? Gulp. When a quick trip to the grocery store turned into $150? Just… how? When I caught strep that one Christmas and had to fork over $118 for an urgent care visit, and that surprise didn’t have a budget. Oy.

If a shirt fits so snug that there’s no space to move inside it, how will you get through your day? You’re going to tug at that shirt, have trouble moving, and walk around like you’ve got a stick up your caboose. And if a sudden unexpected movement is needed, well, you might just rip a seam.

Tight allocation of dollars can get problematic very fast as real life happens.

Don’t operate your budget like you’re one unexpected thing away from bursting. Give yourself guardrails and enough space to maneuver in between. Stay flexible so you won’t get bent out of shape.

Well how? You know I love instructions, so here we go…

Some of our expenses are fixed, right? Meaning they’re the same exact amount every month, and if they increase generally you’re notified (reminds me that our car insurance just went up… love that for us…). But for those expenses you can plan down to the dollar with confidence that they’ll be that exact amount.

For many other categories, however, you can get an idea of a range for the expense. Think groceries, electricity bill, fun money. These are where guardrails can be magical!

Here’s an example. We usually spend about $200 a week on groceries. With a teenager and two pre-teens that’s our average. But if we set our budget for only $200 a week and we have a $300 week for some reason (ahem, a snowstorm that locks us in our home together for 10 days straight), we busted through our budget and now we’re uncomfortable. So we add buffer. Every week. If we spend it, cool. We had it in the plan. If we don’t then there are some extra bucks to save!

Padding these types of budgets (those variable, recurring expenses) in our plan gives us freedom, flexibility and comfort.

Is it perfect? No, plans rarely are. But the practice of living life in the gray area gives some room to pivot, to bend and not break.

So what’s the formula, you ask? I suggest adding buffer of 20% for each guardrail-needing category, but it depends on how well you know your spending and how often you stay on track. My grocery budget is a frequent budget buster, so we typically add 25% as a guardrail for this category. For other categories like dining out and fun spending, where we are a bit more consistent, we add 15%.

No matter how you do it or what your logic is, adding some flexibility will help keep you moving on the right path in shape. You’ve got this!