Saturday, July 15, 2006

If You Don't Budget, Why Not?

I have a question for readers:

If you're a regular reader of money blogs, or (especially) an owner of one, you are probably a bit different than most folks — financially speaking, anyway. And if you're someone who doesn't budget or plan your spending, I'm curious why you don't.

Contrary to what I've heard some "experts" say, I feel that there might be times when budgeting isn't necessary. However, I can't really think of one right off the top of my head. News Flash: I sure do not ascribe to David Bach's reasons for not budgeting.

Usually, when people around me ask why I'm such a big believer in spending plans and using my computer to track the flow of cash into and out of my life, the looks of disbelief I receive are, to me, pretty funny.

These are the same people I overhear, on a daily basis, complaining about their lack of current funds or their spouse's unbridled spending. And the reason that they don't budget is almost always "I don't have time for that!"

So I ask the 'net community at large:

If you don't budget your money or plan your spending in any way, why not? Or, if you do budget, but know (intelligent) folks who don't, why do you suspect they don't do it? Have they been successful not doing it?


— Posted by Michael @ 9:29 AM


Mike, I don't budget, in the general definition...mainly because I've been blessed with a fairly large buffer between income than my spending, however, I did recently purchase Quicken so that I can get a better view of where my money is going--information I'll use to reduce my expenses. Once I get a house, I will budget though.


Every one makes a budget or atleast makes a plan for the money he earns.But majority of people spend beyond budget for situations may not be under their control.This is the fact everywhere and other people are cashing on.


I don't have a 'budget' in the strict sense of the word. I get paid every two weeks. A few days before pay day I know what bills are due, I set them up using online bill pay. I will send in payments that I can afford. This is more of a bi-weekly cash flow statement than a 'budget'.


I budget with Microsoft Money and have been doing so since I was in my early 20's (I'm 31 now). I think I do it because my mother always did, and I learned all of my frugal, money handling ways from her. I just like *knowing* how much I have, how much I can afford to spend without digging into savings or cutting into my retirement contributions, and not having to worry about cutting things too close.

Projecting cash flow is entertaining, too. ;)

I think a lot of otherwise smart people don't budget because the time commitment required to initially set the budget up *IS* kind of significant. My boyfriend took months to get fully-automated with Money because he didn't want to give up half a Saturday to set up all of his accounts, budget items, Internet updates, bills, and recent statements.

Now that he's finally up and running, he barely spends five minutes a week keeping his finances running smoothly and sheepishly admits that the process wasn't as bad as he thought it would be.


I'd love to hear the results of a survey where people were asked what percentage of the features of Quicken and MS Money they actually used. My guess would be a pretty low percentage.

The trick is to find something that works for you and do it religiously thereafter.


I do not have a "budget" in the strict sense of the word - I keep travelling a lot on my work that it is hard to keep track of how much I spend. For example, lets say I budgeted Rs 500 (I'm from India) a month for books and magazines and I end up spending $50 (Rs 2500) when I'm in the US on them. How do I reconcile these? After all, I'm not actually spending Rs 500 from my monthly salary for books I'm spending it from my travel allowance.

What I do make sure is that a large part of my "salary" income goes straight to my savings.


I don't think I have a budget in the strictest sense of the word. I get paid every week the same amount; I will mark down my bills in my calendar and I know how much is going to bills, savings, groceries, etc. I finally got on a budget billing from my power company, my phone/internet bill is roughly the same every month. Although I try and try to have a budget at the grocery, my husband just hates it and we average about $60 - $70 a week for food; I should point out, though, that we eat at home every day for breakfast, we bring our lunches to work every day except for Friday, and we eat dinner at home about 5 nights a week and one of those nights, we have his two daughters for dinner.


I subscribe to the David Bach approach. I basically know how much I spend and where, because I have a memory. I don't need to sit down and track every penny.

I find it much easier to just take the money out at first, and then live within that leftover budget.

One day I'd like to get all my money items centralized on some software like Quicken, but for right now, I just pay bills as they come in via online banking.


Hi Michael! I use Microsoft Money to track our entire financial life, however, I've never been 100% happy with their budget/forecast features, so I manipulate things my own way... Like Maggie, I find projecting cash flow (and net worth!)is my cheap form of entertainment. Currently, I have our checking account (and everything else) projected out to 2008. That way I can see when we hit certain Net Worth milestones, as well as when our debts are paid in full, how much the kids will have in their 529s, etc.

So, regarding a's loosey-goosey at our house. I estimate our expenses (food, gas, utilities etc.) and put that under "Discover Card" or whatever the method of payment is for that bill. Then I "pay" it off from the checking a/c when the bill would be due. I can thus see if we're going to be tight in some spots. If we are, I pay less extra principle on our van loan (which we're actively paying off asap.) Some months are better than others, like all folks. As you know, religiously tracking spending is the only way to know "where it all goes!" And it sure helps at tax time to have records of everything at your fingertips...

P.S. Has anyone successfully captured in Money the essence of recording a car trade-in, the value of the new one, and the debt of the new one? I can get the debt in, but when I increase the "asset value" of my car to reflect the new price, I have to stuff the "gain" into an other income category (when all it really is is increase asset/increase debt.) Any suggestions would be appreciated. (And yes, I do then depreciate the vehicles over time...)

Anonymous StaceyM
, at 1:38 PM, July 20, 2006  

I don't budget because I'm pretty conscious of my finances and goals. When I think of a purchase, I think of it in terms of how it relates to my bottom line/net worth. At that point, I generally choose to keep increasing my networth. The few times I choose to buy stuff, I usually don't regret because it brings alot of fun/utility to me.


I don't budget and never have. I live by David Bach's pay yourself first. I pay all my bills and live on the rest never using a CC to go over. I haven't ever had a cent of CC interest, but use them for everything, including 0% financing, cash back, etc.

I've lived like this for 10+ years since I left home for college. Even now we've started really building our assets with DH done with school and we built our "budget" based on maxing out all retirement options, deciding on a home, savings, etc, then the rest I just sort of spend. I shamefully bought a new computer today $650, oh well.

** Comments Closed on this Post **

Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]