1. Broke? Try Budgeting

    I’m not one of those guys who says that everyone needs to live on a budget. Not everyone does, because not everyone is broke.

    But if you’re broke, then yes, you need to budget your money. Heck, if you’re only semi-broke, you need to budget your money. In You’re Broke Because You Want to Be (review), Larry Winget explains it far better than I:

    You can’t survive spending more than you make. Make it fit. Keep slashing your expenses until you figure it out. Or earn more money. When you have cut the numbers until they fit within your income, live on what you earn. That is what responsible adults do. Be one.

    You’ll be fine. This budget won’t kill you. Will you die from doing this? No. Then don’t worry about it. It’s not forever. It’s what you have to do until you stop being broke.

    Why am I bringing this up? Because within the past week, I’ve had two admittedly-broke individuals tell me that (1) they hate living in the paycheck-to-paycheck club, and (2) they find budgeting to be too hard.

    So paycheck-to-paycheck is where they stay.

    In other words, while some part of them might actually prefer to not be broke, they defy all logic and refuse to actually work at not being broke.

    Sometimes, Reality Sucks

    No matter how you slice it, a successful budget is where you match your spending to your cash reality.

    This process of squeezing your outflows into your level of income will very likely show you things you don’t want to see, and really would like to flat-out ignore. But ignoring is presumably what you’ve been doing this whole time. And look how far that got you.

    I’m a guy who loves to be in control. I’m always happiest when I know where I stand with my money. Therefore, I cannot understand folks who dismiss budgeting as being “too hard” or “too much work.” Whilst my household no longer needs to follow a strict spending plan, and can get along just fine by utilizing Quicken’s cash-flow tab…

    Cash Flow - Click to Enlarge

    … the fact remains that I couldn’t have gotten to this point without having followed spending plans for years beforehand.

    By the Way: David Bach Is an Idiot

    I know David Bach says that budgeting doesn’t work. I know David Bach says that budgeting isn’t fun. I know David Bach says that just automatically slapping money into a tax-advantaged account is a path to untold riches. (I think he said something similar about house-buying, but I never bought that book.)

    I say that David Bach is an idiot. Well, maybe not an idiot, because he knows precisely how to sell financial books to a public that will pay damn near anything to be told that getting rich is easy.

    But he is wrong about budgeting. Wrong, wrong, wrong.

    Getting rich isn’t easy, and getting out of the paycheck-to-paycheck cycle is well nigh impossible if you’re not willing to work at it. And “work” means planning your spending and then tracking your spending. That much I know.

    There — I got that off my chest. I feel better now.

    Back to Civilization V for me!

    • Pinterest

  2. 3 Responses to "Broke? Try Budgeting" ...

    1. On September 27, 2010 @ 8:51 am,
      Lulu wrote:

      Budgeting is difficult when you first start off but it really gets easier as you do it more. I think that most people are afraid of budgeting because they think it is restrictive. Budgeting is not a hard and fast thing that prevents you from spending…rather it is a tool that helps you to see where you are spending so you can reroute your money to the areas where you need it most.

      I enjoy reviewing my budgets and tracking my spending because it is by carefully tracking and planning that I was able to wipe out the credit card debt that I carried for YEARS before I decided to budget.



    2. On October 5, 2010 @ 1:55 pm,
      Myself wrote:

      My problem with all the budgeting software that I have found is that it makes things difficult.
      For instance, some people get paid weekly, some get paid bi-weekly, some get paid daily, some get paid monthly, etc. Or set a standard monthly rate for something, and not have to copy it to the next month … I mean how often does a 2 year contracted cell phone plan change? And regardless of when I get paid, I’d still like to quickly see where my budget would put me in 3 months, 6 months, 1 year, etc.
      I’m currently working on such a program, to minimize my angst regarding these standard budget program shortfalls.



    3. On October 6, 2010 @ 4:55 am,
      LC wrote:

      we enjoy reviewing my budgets and tracking my spending because it is by carefully tracking and planning that I was able to wipe out the credit card debt that I carried for YEARS before I decided to budget.



    Follow comments on this post: Comments RSS Feed

    Leave a Comment

    Notice: By submitting a comment, you agree to the Money Musings Terms of Use. Comments deemed to be spam, or of a promotional nature, may be edited, deleted, or forwarded to Chuck Norris, all depending on the webmaster's discretion. So play nice.