Why Budgeting Fails—and What You Should Do Instead

**Tim Elliott** (0:00)
This is the Morning Drive at Mira Business FM, deep insight into some sensible personal finance habits this morning. Charlie Nunn is a guy who runs Lloyds Bank in the United Kingdom. He's the CEO. And he recently gave some pretty blunt advice on why he hates budgeting and why he's terrified of social media finfluencers.
But he also offered some really sensible personal finance habits as well. So we're going to test that advice against our experience here in the UAE, the reality of living in a place like the UAE, see how it fits. So I'm kind of twisting it. James Thomas, who joins me now.

**James Thomas** (0:46)
Good morning.

**Tim Elliott** (0:47)
It's an interesting article, this BBC article.

**James Thomas** (0:49)
BBC article, yes. I just thought it was quite pertinent to a very number of the conversations we've had in the recent past.
When it's coming from the CEO of one of the biggest four banks in the UK, I just thought it's something we maybe should listen to and have a discussion about.

**Tim Elliott** (1:09)
He's probably a man that knows a thing or two about finance. So that makes some sense. So he talks about, let's jump in. He talks about automated savings, right? To avoid the budgeting trap. So that makes sense. So pay yourself first, get it done, get it out of the way. Don't worry about it. Make it automated. You know, forget about it.

**James Thomas** (1:28)
That's one of the fundamentals. One of the fundamentals, main things we have discussed. Because if it's automated, you don't have to worry about it. You know it's taken care of. It's not that you're not then going to suddenly get that red bill or red email.
You've missed this payment. You haven't done this. You haven't done the other. Or worse, something just stops working, and then you realize it's because something hasn't been paid. It's just a really simple, actually where tech can be helpful in the sense you can just automate all of this stuff, make it very straightforward, save a huge amount of time.

**Tim Elliott** (2:08)
It's just the way you get your salary drop. Right, you get the salary drop, and then you do that, and then you look at the extra drop once you've had the salary drop. It's always a bit disappointing.

**James Thomas** (2:17)
It can be disappointing.

**Tim Elliott** (2:18)
But at least you know you've done everything.

**James Thomas** (2:19)
But at least you know you've done it. And again, I guess I should caveat that just to make sure you do check what is going out, just to make sure the numbers are correct, because even with all this automation, things can sometimes go wrong.

**Tim Elliott** (2:36)
Okay, so let me just jump in there for a second, because there will be people who will be saying, look, even when I do that, I can't do that. I just can't get around to doing that. I can't, I just, this is how I live and this is how things are, right? So living costs are very high in Dubai.
Lifestyle creep is a thing. We've talked about that. It's kind of the norm, right? So is automation enough? Do you need like a big man with a bat threatening you? What is it that you need to make sure you save? Is it just a hard lesson to be learned?

**James Thomas** (3:05)
I think it probably is. Yeah, I mean, I guess I wouldn't, someone coming swinging baseball bats at you probably... No, I'm not suggesting that.

**Tim Elliott** (3:12)
No, no, no, I know you're not. It's a bit of extra hyperbole.

**James Thomas** (3:16)
But the way I've mentioned it is because if you need that level of persuasion to make you... It's one of these adult things, is being an adulting, isn't it?

**Tim Elliott** (3:30)
It is, yeah.

**James Thomas** (3:31)
And while it can be rather dull, it is absolutely essential.

**Tim Elliott** (3:37)
The thing is, you know, it's funny, but you hear that. I mean, I talk to people and it's just, oh, I could never save, I can't do that. And I always think...

**James Thomas** (3:44)
Yes, you can.

**Tim Elliott** (3:44)
You could, it's whether you want to or not, it's up to you.

**James Thomas** (3:47)
Precisely, and that's the key.
It's just to spend, we're not talking hours a week, a month, you know, it's a few minutes. It's just to sit down with a coffee, just every now and then, and just check the bank statement, make sure everything is correct.

**Tim Elliott** (4:06)
There are things that you hate doing, though.