Do you budget? How?

#1:  I don’t budget.  We automatically pay retirement and other targeted tax-advantaged savings.  I keep 1 month’s expenses in the credit union account and put the rest in online savings or mortgage pre-payment depending on rates.  If it’s low after we get paid, then we spend much less the next month until it rebuilds.   We do have stocks that could be sold in an emergency, but generally the float on our credit cards will get us to the next payperiod.  I do keep a LOT of cash (like 4x or 5x monthly expenses) in the accounts for the 3 months in the summer because we don’t get paid… just in case.  That can drop down up to one month’s expenses by the end.

Back when I was a graduate student, I knew where every penny was going at any point in time, because there was no money.  Now that there’s slush I am so glad I don’t have to track every penny.  I like looking at my money but making and sticking to a budget takes too much time for not enough benefit.

#2: I don’t really budget either, and sometimes I feel like that’s a failing.  I keep meaning to do closer tracking of where every penny goes.  I think budgeting is working sort of intuitively or implicitly for me, based on the values I was raised with.  My dad, a financial adviser for much of his career, told me, “When you get paid, pay your bills, save some, and give to charity.  The rest is for fun.”  That is basically what I do, but I don’t have spreadsheets or written-down guidelines.  Cash flow in and out of my checking account is carefully recorded, but I don’t earmark certain money for certain things, usually.  I do have automatic retirement contributions.  My savings account has a healthy emergency fund, into which I dump money whenever possible (and have automatic transfers each month, too).

Do you budget?  Should we feel guilty for not budgeting?

ETA:  Nick from Step away from the mall summarizes Liz Pulliam Weston’s philosophy on when it’s ok not to have a budget.  I qualify!

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12 Responses to “Do you budget? How?”

  1. Sandy L Says:

    I look at my spending patterns regularly and adjust accordingly. I wouldn’t call that a budget.

    I also do the automatic savings things so I don’t have to think. I much prefer earning more and worrying less. I’d never be the type to wash out ziplocs so that I could spend more time at home. (If all your time will be spent washing ziplocs and making laundry detergent, than that’s no fun). I actually really like many aspects of my job, so that makes it work.

    I don’t have a fixed amount I spend, but I say to myself..”Okay, gotta take it easy on home improvement expenses..must avoid home depot this month.”

  2. Sandy L Says:

    BTW, where is the eating veggie post?

  3. nicoleandmaggie Says:

    The veggie post is scheduled for tomorrow.

    Yeah, we’re in a “gotta take it easy on spending this month” and “time to request those credit card rebates/daycare FSA reimbursements” etc. sort of budgeting system. It’s just easier that way.

  4. rogernelson Says:

    I budget, but I still hate the sound of it. When my wife became pregnant we needed to find a way to survive on just my pay and we didn’t want to end up further behind. Out of necessity we created a plan which I guess became a budget. We don’t necessarily stick to it but we do regularly (every couple of months) change the way we do things to try to get ahead while not feeling like we are suffering too much.

  5. Everyday Tips Says:

    I have a flexi-budget. It is more of a guideline than anything, but I don’t track my spending to the dime. There are certain things I put money aside for each month (taxes), but other than that, I just try to keep my spending to a minimum. Some months are great, others are awful, but it averages out in the end.

    • rogernelson Says:

      I like the name flexi-budget. I definitely don’t track my spending with any real accuracy. However, I do use a number of bank accounts that I set aside for different purposes. 1) General Expenses, 2) Bills, 3) Big Bills, 4) Saving/Investing, 4) Holidays. It’s sounds overly rigorous and complicated but it helps me compartmentalise how much money I want to allocate to each.

  6. Budgeting in the Fun Stuff Says:

    Well, you know me. I budget. Down to the penny. Every month. I like knowing where it’s all going, but I am getting a little more laid back as time goes on.

    Nobody should ever feel guilty for not budgeting. I’m a big believer in doing what works for you. Budgeting, not budgeting, whatever. If you pay your bills and save for your future, I don’t think it should matter how you get there. :-)

  7. nicoleandmaggie Says:

    ET– I love the term flexi-budget too!

    Rodger and BFS– Sounds like actual budgeting (or close to it) is working well too!

  8. Money Reasons Says:

    I sound a lot like you two! I don’t have a formal budget. I blogged out an automated budget, but basically it is me comparing my monthly numbers at the end of each month to my projects that I have in a spreadsheet that I tweak, sometimes. My retirement contributions are automated. I don’t have an emergency fund, but I have enough in investment that I’d be well covered. I’m totally debt-free, so I’m doing okay…

    I do spot-budgeting sometimes (as with my Lunch Experiment), and I’ve kicked around the idea of an entertainment budget…

    Hmmm, reading Everyday Tip’s comment, my automatic budget sounds like it’s related to her flexi-budget! At least to a degree…

  9. Carnival of Personal Finance #273 – Labor Day Edition Says:

    [...] article from Nicole and Maggie on wether or not you budget. . I do budget, but I keep it loose, so that I don’t feel bad about myself if I don’t [...]

  10. Revanche Says:

    Once upon a time, I compulsively budgeted, but since I moved up to the Bay Area I budget solely by hope. I throw money into the savings accounts, into the expense accounts, and hope for the best.

    This actually bothers me to no end because on a daily level, I feel like there’s no way I could possibly be making measured progress – if I am, it’s through sheer luck which, as we all know, can go sour at any time.

    On the other hand, being completely debt free does give me a bit of freedom to be a bit laissez-faire (and let’s face it, lazy) about addressing my discomfort.

  11. Tara Says:

    I budget, in my own way. Ironically, during university, I didn’t. I moved every 4 months, so nothing was remotely consistent in terms of expenses. Now that I’m living in the same place (minus traveling for work), budgeting is easier.

    I started out with a spreadsheet itemizing my monthly, bimonthly, and yearly bills. Then I realized that all sorts of things crop up “out of the blue” like replacing my passport and driver’s licenses every 5 years, buying Christmas and birthday presents, or paying social league dues every year. Then it grew into me realizing that jeans and bras and socks and other clothing items wear out eventually, so I estimated the cost to replace one of each item, decided on the quantity that I should cycle each year and added that into my spreadsheet.

    My spreadsheet has grown a lot, but what remains is a very visible way of me not feeling guilty about spending too much or too little or not anticipating the infrequent expenses. I make a good income, so if I go over budget, that’s not really an issue. I’m a saver, not a spender, so by very specifically itemizing what I plan on spending over the year, I can then see how much I can save and I feel much better!


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