The budget is the most powerful and important product in personal finance and I'm not sure that the financial industry has realized it yet.

But how can this be? Everybody and their momma talks about budgeting. Every financial professional preaches the importance of having a budget and all that will go wrong if you don't.

It's true! Every financial planner, advisor, agent, coach, influencer, Youtuber, blogger, parent, and so on will tell you that you need a budget. But most people still view the budget as a chore, a bundle of rules and restrictions, something you just have to do.

"Nobody likes it, it's not fun, it's not sexy, but it's something you just gotta do!"

That's why so few truly understand what the budget is, and therefore fail to unlock it's true power as a result.

You cannot know that which you hate.

In this post, I'm going to:

  1. break down why efforts to bring people to the budget (and change their financial lives in general) are not working very well,
  2. explain why the budget is a product in need of development, and
  3. share what improvements need to be made so that the majority of people want the budget.

I'll also show you what the budget really is.

Self-help ≡ Self harm?

You've probably heard the saying, "Change happens when the pain of staying the same to a point where it is greater than the pain of change." It's a famous quote attributed to Tony Robbins.

What he means, graphically,

is that this scenario will result in no change. Why would a person take any action to get results when it's less painful to stay put?

The answer most commonly provided — especially by the $10+ billion self-help industry — is that you must increase the pain of staying the same to be greater than the pain of change so that the massive action required for transformation can take place.

Of course, they don't say it like that because "Start living the dream" sounds much better, and probably sells more tickets.

I have nothing against Tony Robbins, or anyone else in the self-help industry. They have helped thousands upon thousands, maybe even millions of people. But most of the people who attend his seminars see no results.


The industry gives two answers that work together very well.

First, "They just don't want it bad enough."

But is that true?

Yes! Sounds harsh, but it is!

Most people live quite well. They lead comfortable lives. No matter how much they may complain about their bosses, the government, the horrible roads, and social injustice, they know deep down how lucky they are to have what billions of people would kill to have.

Second, the up-sell: you must consistently expose yourself to [our] motivation. Otherwise, you won't take action and nothing will change!

To put it another way, going to a motivational seminar is like stabbing yourself with a knife. It generates massive pain that will cause you to take massive action for a short period of time — Clean the wound! Rub ointment! Stitches! Apply gauze! Of course you will not continue all this once it has healed. The pain of staying the same is only temporarily increased, and the desired result cannot be reached in this way.

Why anyone would stab themselves a second time is beyond me. And if a doctor told you to give your wound a paper cut every morning to keep activity up, he'd surely be out of work in short order.

So, what? Are the majority of people stuck living what they consider "mediocre" lives because a Tony Robbins' seminar isn't able to create lasting change?

And if going to motivational seminars every quarter, listening to Zig Ziglar tapes on the way to work, and reading five self help books every month won't do the trick, is the majority screwed?

The answer is no, but the type of product provided by the self-help industry is focused on the wrong thing. As sales increase, results remain atypical.

To understand what's needed in this particular case, we first need to introduce another topic to the discussion.

Product Development 101

The Chasm is a concept popularized in the early 1990s by Geoffrey Moore that states, basically, that the functionality (or simply the marketing, as some might argue) of a product must improve to a point where the majority of people see its value.

Innovators and early adopters will participate based solely on vision. They will put up with a buggy product, self-service integrations, unclear and vague onboarding procedures, and many other inconveniences because for them, the pain of staying the same is higher than the pain of change.

Everyone else wants a complete, reliable, and proven solution before they commit. They do not want to fiddle with the thing, create a bunch of technical bug reports, and could care less about being featured the startup's slick-looking website. Their pain of staying the same is lower than their pain of change.

For every issue or problem out there, we all fall somewhere on this spectrum. You are an innovator in some areas, and a laggard in others. Where we fall depends on our core interests, what's going on in our lives, and other things.

But MOST of the time, for MOST things, MOST of us are on the right of the chasm. This is certainly true when it comes to the budget. Most people live comfortable, good lives, so they don't have much real reason to go do extra things to solve personal financial problems.

This might sound counter-intuitive because we constantly hear all kinds of statistics about how horrific the state of financial literacy is, but mostly this seems to be the latest tactic in creating a sense of urgency to draw people into a marketing/education funnel for various financial products and services. Why would several 100+ year old financial institutions jump on the bandwagon of openly admitting how poorly they have been serving their customers?

For this reason, I believe the budget has not yet been able to successfully cross the chasm. The budget is not something that can be forced onto someone.

Looking at some statistics on budgeting in the United States...

... the numbers are all over, and I'd be surprised if they are even that high, because budgeting and BuDgEtInG are very different things. I doubt that even so many people are budgeting because I've seen how many people KeEp A bUdGeT. I myself hAd A bUdGeT for many years. I hooked up all my accounts to Mint and logged in every once in a while to look at the numbers.

There are also other statistics that do not make sense in conjunction with the above, such as the number of people currently living paycheck to paycheck. If 39% of Americans have been budgeting since 2007, the result should be that no more than 61% live paycheck to paycheck, as that would indicate BuDgEtIng, or a significant turnover within the 39% percent of budgeters since 2007.

So how will the budget cross the chasm? How will the budget become mainstream, and not something you just have to use to save yourself in a money crunch?

No! You cannot bring the budget to people. People must go towards the budget. And from the Chasm concept, we already know what to do: make a complete, reliable, and proven solution to bring people to the budget! Only then will it be accepted by the majority of people.

The financial industry simply does not get this, because even with all the fancy technological advancement in budgeting software, endless category category lists at your fingertips, downloadable templates, how-to articles and videos, seminars, the budget still sucks.

Just search 'budget most powerful tool personal finance'. See what you get.

Maybe it's because the industry believes that there's no big money to be made in the budget, or they're impatient to make a profit, but nothing that I've seen so far makes the budget fun for most people.

Nothing that I've seen so far provides an amazing user experience for most people.

Most importantly, nothing that I've seen so far drives the pain of change low enough to create the lasting change required for transformation for most people.

Once you have a complete, reliable, and proven solution, the budget will glide across the chasm and amazing things will happen.

What is a budget?

The budget is not a product, but a product.


The BUDGET is a product, but not in the sense you're most familiar with.

Still confused?

Look at the definition of product:

Does it have a second definition?

Were you ever told that the BUDGET is actually a RESULT?

Don't you think even the mathematical definition of 'product' describes the budget better than the definition we've been conditioned to give it?

With this new understanding, read this article again. It'll blow your mind.

It's the most powerful, most important result in the financial industry, the self-help industry, the makeup industry, the health industry, and perhaps every other industry on Earth, yet we've been told that the budget is simply an annoying chore you have to do.

What a shame!

Now the next logical question: a result of what?