Why budgeting is terrible advice for lower-income people
SalonVeronica Duke knew what it was like to grow up in poverty, and she wanted to create a better life for her children. What this common advice ignores is that people experiencing financial hardship are, in fact, “budgeting” their money. We need your help to stay independent Subscribe today to support Salon's progressive journalism “Often the problem is just that there's not enough money coming in,” said Ortel. You could never buy anything that wasn’t a necessity.” It’s cruel to tell someone to budget their money when what they really need is a livable wage and a viable social safety net — not least because budgeting doesn’t even work. An analysis of multiple research papers and studies at the University of Minnesota noted: “Although budgeting is commonly recommended and many people do keep a budget, little systematic evidence exists on whether budgeting actually helps people achieve their financial goals over the long term.” The study found that budgeting reduces the enjoyment people experience while spending money, especially for people who already face financial constraints, like Duke.
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How to budget: A guide to making better budgeting decisions
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