There is a lot of misunderstanding surrounding budgeting. Examples like pervasive narratives that budgeting is a way to create or grow money or that proper budgeting will make one’s life financially simpler. At the root of these narratives, is the theme that poor people do not know how to budget and their poverty is a self-created problem.
Let's define what budgeting actually is: it means that a person is mindful their income and spends their money accordingly, or ‘stays within their means’. Essentially, it boils down to you don't spend money you don't have. Budgeting is best applicable to people who have a disposable income and wish to save it and those who are fiscally irresponsible. These are traditionally pervasive issues of the middle and upper class, not the impoverished.
For anyone in poverty, staying within your means is as much a law as gravity. Poor folks don't have safety nets. Not having a disposable income isn't a personal responsibility issue. If the money doesn't exist you don't have the money. We don't even consider this budgeting, it's the default financial state. All money is accounted for and already theoretically spent. You don't look at your paycheck as a whole sum but rather piecemeal. It isn't x-amount of dollars to potential save, it's x-amount of bills that need to be paid, with a paltry remainder that cannot be grown.
As for financial simplicity, it definitely comes off on paper as straightforward, but in action it's never is because life is unpredictable. When you live in poverty, the threat of unexpected expenses constantly looms on the horizon. It can seriously mess up a very tight budget, and no amount of shifting numbers around will change it. Too many nights I've laid in bed tallying bills over and over again trying to find money that does exist and feeling panic in my gut when I know the numbers are correct. It's a terribly, stressful state to exist in and it dictates and drives your choices. Poor folks often have strict routines and responsibilities to minimize unexpected expenses. In short, the idea that people who can make four dollars of rice last a week lack fiscal responsibility is not only wrong, it is condescending and insulting.
Poverty cannot be fixed by budgeting. This narrative that poverty is a result of poor money management is insulting, over simplifying and incorrect. Poverty can be solved by addressing the institutions that create, perpetuate and profit from it.
Finally, there is the narrative that those in poverty, who are the labor force of a consumerist culture, should not indulge in buying their production. Meaning, poor people work at the companies we are advised to not ‘waste’ our money on. What a problematic cluster-fuck. These companies absolutely have the financial means to pay their employees a living wage. These companies absolutely have the financial means to pay its employees a living wage. This is not a radical statement. It's a fact. Poverty can be solved by holding institutions accountable of their fiscal responsibilities. It cannot be solved by believing in myths that you can squeeze dollars from pennies.
