I have a confession: I don’t budget. I’m not anti-budgeting. In fact, I think someone who tracks their spending has a leg up on the person who doesn’t. But I don’t equate budgeting with financial success.
I know plenty of people who are good with their money but aren’t plugging every transaction into a spreadsheet or budgeting tool.
Why I don’t budget
I love personal finances and enjoy planning out my financial life. So why don’t I budget?
- It’s not fun. Some get a kick out of budgeting, but not me. I just don’t get excited.
- It’s time consuming. It takes time and consistency to be a successful budgeter.
- Unexpected expenses happen. I like things to fit neatly into my plans. When unexpected expenses occur, it throws me off if I’m trying to budget, which causes frustration.
How I get away without budgeting
Having a consistent budget is good and for some, it’s essential. I recognize I have a few characteristics that have allowed me to “get away” with not budgeting.
- I’m not a big spender. As an Enneagram 5, I’m naturally more “minimalistic.” My wife has to do more than give me permission to buy a new pair of shoes—she often has to buy them for me (or I never would).
- I have a margin in my cash flow. There was a time in my life when budgeting was essential. As an entrepreneur with a start-up business, I had no choice but to budget. Now, I don’t need to budget. I know my monthly bills and basic expenses will be taken care of.
- I am getting the “big things” right. After selling my house, starting a business, and basically starting over financially, my wife and I were insistent on getting the big things right. This includes how much house we buy and what types of vehicles we drive. Sadly, stretching yourself on these expenses can strangle the rest of your cash flow.
What I do instead
If you don’t budget, you still have to incorporate some things into your life to be financially successful. For me, I have to do the following:
- Automate my savings. Why do people budget? To devote a portion of their income to savings and investments. The alternate route is to automate savings. Whatever you don’t save is freed up for other purposes.
- Periodically review monthly expenses. I don’t budget per se, but I do write out and review monthly expenses from time to time. Why? I want to prevent lifestyle creep, the phenomenon that our lifestyle always seems to rise faster than our savings. Small expenses can add up and become big things over time. This also reminds me of any fees I’ve added to my budget that I no longer need.
- Talk about money with my wife. Spouses need to be on the same page about money, especially if you aren’t budgeting and tracking expenses. Talking about finances with my wife gives me insight into our daily money habits (the part she resides over) while giving her a vision for our long-term financial plans (my area of expertise).
Why I should budget
I think everyone should give budgeting their best effort. Putting some time into our finances is a good habit. Having blinders when it comes to expenses is not wise.
If you budget well, you will likely be more successful than if you don’t. However, it’s okay if you don’t budget. Don’t feel guilty. For all my fellow “non-budgeters,” just make sure you automate your savings, periodically check in on your fixed expenses, and have meaningful money discussions with your spouse.
I will probably give budgeting another try. I know I will increase my financial well-being if I do. I just won’t beat myself up if I fail.
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