Comments on: Financial Confession – I Don’t Budget

By: Cindy

Cindy — Mon, 08 Jun 2009 11:27:27 +0000

One of the best ways I can do better with my spending is a very simple approach. I have to stay out of the stores. I used to spend hours in Walmart just looking around and end up spending way more money than I should. Now, I AVOID the stores and it has made a major difference. Sorta like the tips on catalogs, etc., if you don’t see it, you won’t be tempted to buy it!

By: ctreit

ctreit — Sun, 10 May 2009 17:28:50 +0000

I think budgets are important but a budget’s biggest benefit comes from establishing spending habits. So, I agree with you that you don’t need to follow a budget for the rest of your life. Once good spending habits are established and you spend less than you make, it is okay to live without a budget. I go in and out of following a budget depending on whether things change in my financial life or if my headline numbers don’t look so good anymore.

By: Ben

Ben — Sat, 09 May 2009 19:36:05 +0000

Alyson, using I don’t see anything wrong with using credit cards, as long as you pay off the balance each month. That’s what we do. Of course if you can’t pay for what you buy on the card then it’s not a good idea to use them.

Alan, I wouldn’t say your method is dangerous. If you’re reviewing it in the middle and at the end of each month then even if you over spend you’ll catch it pretty quickly. Just make sure you’re putting aside some of your money for savings so you don’t spend it all.

Michael, congrats on your upcoming retirement! I agree, if you can spend less than you make and put away money for savings without making a budget you should be fine. Of course for people who have a problem managing their spending, a budget can help them stay on track.

By: Michael

Michael — Sat, 09 May 2009 16:20:49 +0000

My wife and I are now looking forward to retiring in less than 6 years. I will be 60 and she will be 57. We are hoping to have a retirement income about 3 times the average industrial wage. Despite that rosy outlook we have never created a budget, even when we lived in Africa for 2 years making $300 a month each or when we were both unemployed for 7 months and we ineligeable for EI benefits. Our secret is simple – we always spend less than we make. I remember back in the mid 1980’s when we both got full time jobs and were each making $24,000. We never felt so rich in our whole lives. We are careful spenders and consult each other on any item over $100. All our money has always been in a joint account so we do have to trust each other 100% on financial issues. We try to not get committed to ongoing expenses. We would rather save and buy the item for cash, rather than borrow – even for cars. My wife has some very expensive business suits and in fact each one likely costs more than I spend in a year on clothes, but she needs it for her work – so it is a good investment.

By: Alan @ Saving For Serenity

Alan @ Saving For Serenity — Sat, 09 May 2009 04:58:57 +0000

I don’t budget.

I keep track of my spending though. On a regular basis I’ll go back through all my expenditures, tally them up, and take a look at where I am at. I like to do this at the end of the month and usually in the middle of the month as well.

Like some of the other comments, its not a budget, but I do get a chance to see if anything is “out of whack”.

I think that it might be a lot more dangerous to do it this way. I mean, if you’re budgeting, you’re keeping track on a daily basis, and you know that you can’t go over a certain limit. If I keep track AFTER I spent all my money, it’s too late, the damage is done. I suppose if you have a buffer it is okay, but that’s money you can never get back, no? What do you think?

By: Alyson

Alyson — Fri, 08 May 2009 09:10:31 +0000

We have our retirement funded, have an emergency fund.
We took the Crown.org financial class. Our problem is still credit cards so need to work on being more frugal/reserved before buying (with a new cutie 2.5 year old and two granddaughters, it is hard!!).

http://www.alyzabethan.blogspot.com

By: Ben

Ben — Thu, 07 May 2009 02:25:24 +0000

good point moot, it is nice to have a snapshot of where your money went.

you’re right SaveBuyLive, if you’re not careful your spending can creeep up on you

frugalscholar, I guess budgets are formal boundaries, but if you’re frugal your boundaries are built in so you can make it work informally, good point.

By: Jon

Jon — Wed, 06 May 2009 14:36:40 +0000

My wife and I live much the same way, financially. I have a very good idea where all of my money is going, and I’ve been tracking my expenses for over ten years in MS Money. I have a target amount for spending in variable categories, like fuel, dining out, books and movies, entertainment, etc. If I go over a bit one month, I’m just mindful of it and try to watch that category more closely the following month. I put a fairly large percentage of our income away in long term and short term savings, and have a good cushion for unexpected expenses. Like you, it also takes us months or years sometimes to make a decision on major purchases, like new vehicles or furnishings. Having a large margin between income and expenses makes things easy.

By: marci

marci — Wed, 06 May 2009 13:54:21 +0000

In the beginning, when the debt outweighed the income, it was necessary to budget or not eat…. However, once the debt was paid off, the need to budget was gone. The frugal habits by then were ingrained and if anything, now I have to force myself sometimes to spend money. Quite the opposite.

But, because of the time it took to become debt free, I know that I will never willingly go into debt again… therefore, knowing I won’t overspend and that I always pay myself first, I don’t worry about a budget as it is ingrained in my spending habits firmly.

By: moot

moot — Tue, 05 May 2009 15:45:19 +0000

I do a kind of “after-the-fact” budget. Once a month I import all the prior month’s transactions for all my accounts & credit cards into some software. It all gets categorized mostly automatically and I just take a quick look to make sure nothing was too far out of balance. Most categories have a trend that is either on average fixed or varies seasonally. It becomes obvious quickly if something went very far over the norm for a given month. And if anything needs corrected, it shows me what areas to pay more concious attention to over the next month.

I don’t feel the need to monitor my money as it gets spent, but a brief look over my shoulder once in a while to see where I’ve been just gives me a good sense that everything is still on track.