Financial Confession – I Don’t Budget
May 5, 2009
My wife and I don’t make or follow a budget, at least not formally. We own a copy of Quicken and Microsoft Money and I’ve played around with some of the best personal finance software online but we don’t sit down every week or month, figure out what we’re going to spend, and track it to the penny.
Non Budgeting Strategy
This approach has worked with us for some of the reasons that Mighty Bargain Hunter describes and a few others.
We have relatively fixed costs; our spending doesn’t fluctuate a lot from month to month. We don’t make a list of all the costs we need to cover each month but we have a pretty good idea how much is coming in and how much we need for expenses.
I don’t like to spend money; perhaps this is why I’m a bad tipper. (By the way, I got a lot of heat for that one but if you read the whole thing I explain that I know I’m a bad tipper so I let my wife do the tipping for me since she does it fairly. When she’s not around, I tip more than I think she would just to be safe.)
Thanks to her frugal Midwest roots my wife isn’t a big spender. Although sometimes she spends money on things I that I wouldn’t, I can’t really blame her since I don’t like to spend at all : )
We have about 6 months of savings built up in our FNBO Direct and ING Direct accounts so we have a reasonable cushion. Of course we don’t want to tap into it for monthly expenses but we don’t worry that we’re not counting every penny since we have something to fall back on if we were to need it.
We don’t rush into any major spending decisions. It takes us months to decide on big purchases, which helps us make sure we really need what we’re thinking about buying and gives us time to save up for it.
Budgeting Strategy Shift
All that being said, we’ve been down to a single income family since 2007. Although my wife does earn money with her part time job, she doesn’t work in the summers and she took off extra time this year for our new baby.
The new baby means higher insurance costs and now two kids in diapers. To top it off, I took a pay cut for a better job. So rising costs and shrinking incomes mean we’ll need to start counting our pennies more closely.
We sat down and had a money discussion before the baby came and will come up with a new budgeting strategy in the coming weeks once the initial baby blitzkrieg has subsided somewhat.
What about you? Do you budget or do you “spend by the seat of your pants”.
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