Before you make a purchase, take a second to think about what you might be giving up. Credit: Colourbox
Let's get something straight. A budget doesn't tell you what you can't do — it tells you what you'd rather do. Anyone who took Econ 101 has heard the term "opporunity cost." Definitions may vary, but the concept of opportunity cost tells us that the real cost of something is the value of whatever we didn't buy in order to purchase it.
Here's one real world example: The real cost of your $399 iPad isn't $399. The real cost of the iPad is what you gave up when you bought it, like twenty $20 meals or two (maybe three) pairs of fancy-ish shoes.
The point is not that you shouldn't have bought the iPad. If it's something you want and budgeted for, great! The power of the budget is not that it tells you not to buy something; it just shows you exactly what you chose not to buy when you put the new item in the shopping cart.
If you want to avoid buyer's remorse (and credit card debt), get an effective budget on your side. Budgeting apps, like Level, can be really helpful in showing where your money is going and planning where you want it to go. There are different categories, such as gadgets, food and drink, and shopping, and you can allot certain amounts of money into each category. Then, when you're in the Apple store debating buying that iPad mini, you can look at the app and see how much money you have saved in your gadgets category. An effective budget isn't arbitrarily saying you can't or shouldn't spend. It just clarifies what the purchase requires you to sacrifice.
In either case, you win. Your budget gave you good information, and you acted on it. That's money-management bliss, and that's why you need a budget.
Mark Butler is the director of outreach for YouNeedABudget.com.