#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!