The basic concept of the Life Sucks Budget is that for many of us there is just not enough money to pay the claims of bill collectors AND to pay the really important things of life, like retirement savings, emergency cash accounts, mortgage payments and modest family vacations. Something has to give, and too many of us put ourselves last and pay nothing towards our future needs and dreams so that we can just get by another month without receiving embarrassing phone calls or letters. The Life Sucks Budget is a call to rebalance this relationship and to put our legitimate financial and family needs first.

The fact is, many of you are already on the Life Sucks Budget but you don’t realize it or perhaps you are reluctant to confess that is what you are doing.

Spending 25 years interviewing clients about their financial habits reveals that at least half of the people I meet have no hope of being financially successful. They just want to get through the week and find a little peace in their day. They do not believe that they can win financially, and that mindset has a radical affect on their behavior.

This should come as no surprise. If you were running a 100 meter sprint against Usain Bolt would you train very hard? You already know that no matter how much you train you will never be able to keep up with the world’s fastest man, so why even try?

The evidence of people who think they will ultimately lose in the game of finance is found in their bank statements. The spending pattern is clear, and we review six months of bank statements for every bankruptcy case we prepare.

When you think that the game is rigged and that an average person has no chance of winning, you spend more on restaurants. You enjoy the day. You buy really nice clothes because they feel good and boost your self-esteem. Your cable and cell phone bills are high since you place a premium on being connected. Chances are you lease a car or have a large car payment since you work hard and have “earned” a nice ride. Often your house payment is disproportionate to your income and it drains every last drop of your take-home pay, but it makes you happy to provide a nice place for the family.  This is one form of the Life Sucks Budget since you put yourself first and prioritize your current happiness.  And, it is also a sign of defeat since, like Thelma & Louise, you are headed over a cliff but you can’t bring yourself to be honest about it.

But something interesting happens when you ask a 25-year-old if they know how much they must save every week over 40 years to become a millionaire.

Do you want to become a millionaire? Yes? Well, do you know how much you have to save every week to get there? No. Guess how much? Think about it.  One million dollars. 40 years. 52 weeks a year. Why, that’s 2,080 weeks over 40 years.  How much do you have to save each week?  $500 per week?

And then you just wait. You listen for their answer. “Want to be a millionaire?” They smile and chuckle.  “Sure!” they reply.  “Well, how much do you have to save a week? What’s your guess?”  And they say things like $1,000 per week.

And when you tell them the answer could be as little as $50 per week depending on how the stock market fairs over the next 40 years and whether they have a 401(k) plan at work that matches their contribution, their eyes open wide.  “REALLY?  Only $50 per week?”

That can be a life-changing moment. When you realize that you can retire a millionaire by just saving $50 a week, even the person working as a Walmart greeter can become a millionaire if they just save every week. That knowledge changes you. You don’t have to lose. Even if everything in your life goes bad, even if you have a crappy job, even if you get divorced or change jobs or raise stupid kids.  You can still win financially if you tap into real financial knowledge and apply a proven system of building wealth. Like getting a 50 meter head start on Usain Bolt, you start to feel you could win. And, you start training with vigor. Because now you believe.

Whether your savings turn into a million dollars or just a lousy $300,000, haven’t you won either way? It’s going to be a lot of money if you apply the system.

The truth is you can retire a millionaire even if you have to file bankruptcy at some point in your life, as long as you keep your fingers off the retirement account when life sucks. You can pay off your home mortgage in 15 years instead of 30 if you don’t buy too much of a home and pay an extra $100 per month. You can have $10,000 in an emergency cash fund if you pay yourself first and make that a priority. But that’ never going to happen if you walk around with an unspoken belief that you are a loser and that the system is rigged against people like you.

This is probably why I think Dave Ramsey, despite all his craziness and oily sales pitches, is about the best money adviser out there. He reprograms your your mind and spirit to understand that you can win financially if you start acting and thinking like a winner.

So instead of acting as if life sucks and engaging in a spending pattern where you maximize today’s wants with a new car or a fancy home and the 500-channel cable expense while barrelling down the highway at maximum speed in Thelma & Louise fashion, stop and think for a moment. Why are you spending money in this fashion? Because you secretly believe that ultimately you will lose in life so you should maximize today’s enjoyment?

If you are going to apply a Life Sucks Budget because you acknowledge that income is limited and that problems just never fully go away, then why not apply an intentional budget that pays off the mortgage, provides for regular family vacations, creates college savings accounts, and leaves a plentiful retirement fund? Life does frequently suck and we are not fully in control of what happens, but we can achieve our financial goals if we make the decision now to pay ourselves first and give what is left over to those never-ending obligations of life.

Photo courtesy of Flickr and Ken Lund.