18 Comment responses

  1. Avatar
    September 03, 2013

    An interesting take on the topic of budgeting and more similar than dissimilar to my own. While I do allocate a specific amount of resources (dollars) to be spent in respective areas during a given period of time (generally monthly), I do not track everything down to the penny. My overarching approach is to fund my retirement accounts first, pay my bills second, and anything left over I consider to be discretionary funds to be spent as I please. Can I tell you how much I spent on coffee last month? Nope. However, I can tell you that all my savings/investment objectives were met and my bills were paid.
    James Molet (SavvyJames) recently posted…Wealth AccumulationMy Profile

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      September 03, 2013

      That’s exactly how I feel James. I just can’t allocate myself $30 for beer, $150 for gas, $14 for haircuts, etc. I buy what I need when I need it. And I try to do so as cheaply as possible. And, believe it or not, I buy things I don’t need like good beer too. But that’s ok as long as I live cheaply and keep a big cushion in my life. Strict budgeting and my brain just don’t jive very well.
      JoelLarsgaard recently posted…My Google Chromecast ReviewMy Profile

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  2. Avatar
    September 03, 2013

    We sort of budget. We have it so that we can see where our money is going and where we are overspending.
    Michelle recently posted…$9,554 in August Extra Income – Looking for Affiliate IncomeMy Profile

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      September 03, 2013

      I think maybe from now on I’ll call it the “sort of budget” Michelle. I just hate being confined in certain aspects of my life. If I want a beer on the 31st of the month ain’t no budget gonna stop me. :)
      JoelLarsgaard recently posted…Should You Pay for Investment Advice?My Profile

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  3. Avatar
    September 03, 2013

    Moose!

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  4. Avatar
    September 03, 2013

    If “spending less than you make” and “having a financial cushion” is in your DNA, like Joel (unlike me), then you are going to be successful with your money. Unfortunately, 75%+ of Americans are no where close to practicing/grasping this concept. Most people need a plan for their monthly (sometimes weekly) spending, otherwise, they’ll just keep wandering through their financial life without a clue, treading water, or going further into debt every day.

    I’ve found that a budget needs to be a written plan for every dollar of your money before you spend it. And a budget isn’t always restrictive, though many automatically make that association. When my wife and I started budgeting hardcore (when we got married 4 years ago), even on one income at the time, we found that we had MORE money than we thought because we could actually SEE where it was going to go. Many people, who know they need to get a grasp on their finances, just assume they don’t have enough money.

    I think “budgeting via Mint” or by bank statement is dangerous for most because the damage (usually impulse buying) has already been done; I call it a ‘financial autopsy’. We use Mint religiously as well, but just to track against our budget plan.

    Great stuff, Joel, I really enjoy all of your blog posts!

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    • Avatar
      September 03, 2013

      Thanks for the comment Josh. I think personality and experience goes a long way to determining how we view money. My experiences and personality have made me a bigtime saver. My personality also doesn’t like to be tied down to specific numbers. I basically hate math. :) But you are totally right, I don’t think that just because I don’t use a budget that most people shouldn’t. Know your own strengths and weaknesses in order to make the right decision. In fact, a great majority of folks probably DO need to use a budget. Just wanted to share my experience.
      JoelLarsgaard recently posted…Great Customer Service Changes EverythingMy Profile

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  5. Avatar
    September 14, 2013

    It seems to me you are still mentally budgeting. It’s just not written down and formal. You are mentally tracking things via Mint and “keep a mental note of the progress”, as you put it. So it may just be a matter of semantics as to whether you are budgeting.

    The other thing I would note is that you used to formally budget. This helped you make sure your decisions were based on actual numbers and helped make sure you were on the same page financially as your spouse. It probably also helped you make sure you were spending money on the things that were most important and not just the overall spending number.

    But once you went through that exercise and learned those lessons, I agree it’s probably not necessary for most people to continue to have that level of formality indefinitely. When things truly become a habit, we don’t need to fill out spreadsheets each month to track things that are already habitual.
    S. B. recently posted…Summer Solstice 2013 UpdateMy Profile

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      September 14, 2013

      That’s pretty true SB. I didn’t let it all just go to pot! But, most people have an excel spreadsheet type approach to budgeting. I was just trying to communicate that if you spend your money wisely and save even more you can do away with tracking every single penny. You don’t have to be a “slave to the budget.” Thanks for your comment.
      JoelLarsgaard recently posted…The Best and Cheapest Home Security SystemMy Profile

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  6. Avatar
    September 20, 2013

    I love this post!

    I think I’m a mix a both. I started keeping an Excel spreadsheet in the middle of 2006 when I was working a full-time and part-time job and was making no progress. I had a a car loan for about $6000, about $1000 on credit cards and $38,000 in student loans. I found when I started budgeting that I was consistently spending $100-$200 than I was making. Had no savings and looking back I don’t have the slightest how I was making it! As long as I had $30 in my checking account the day before payday, I figured I was okay.

    Fast forward 7 years and I paid off the car and credit card years ago, finished paying on my student loan last year, am about to pay off the loan on the 2011 Escape we bought in May and have a nice cushion savings account and retirement.

    I don’t think I could of made it out of that hole without having my spreadsheet. But when it comes to the money spent in a month, I’m not a stickler at all for how much I have “budgeted” for each category. Bills are always covered, everything else just fits in by being thrifty and splurging just on occasion.

    I do believe budgeting saved my financial tushy! But once you’re out of the debt and you have a good footing – coasting is totally cool! Keep up the great posts, Joel!

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      September 20, 2013

      Thanks Emily! I’m so bad at Excel spreadsheets. They make my head hurt. I’m so glad it works well for you and has helped usher you into a more financially secure place. And I totally agree that for some people, at many points in life, a budget is essential. We’re just fortunate that due to our extreme thriftiness we don’t need one.
      JoelLarsgaard recently posted…7 Things That Will Never Go Out of StyleMy Profile

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  7. Avatar
    November 08, 2013

    For the last year, I have taken a break from budgeting. My family made it work, but I was unable to kick the high levels of anxiety I had throughout for not having a handle on how we were doing.

    I’m going back to more formal budgeting of late to get a clearer picture and some peace of mind
    Ragnar recently posted…Budgeting Accountability and TeamworkMy Profile

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  8. Avatar
    February 05, 2014

    if people who are in a hard place with money they should be budgeting. i mean you should live within your means and not spend money like it grows on trees cause one day your going to need some money and it wont be there.

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    • Avatar
      February 19, 2014

      Thanks for stopping by Thomas! I was trying to share how I do things. It works for my situation and personality. It certainly doesn’t work for everyone. In fact, I would imagine that there are a lot of folks that absolutely NEED a budget. I certainly don’t knock the budget overall. It just isn’t the best overall strategy for me.
      JoelLarsgaard recently posted…7 Steps to Make Sure It’s the Right House to BuyMy Profile

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  9. Avatar
    February 19, 2014

    Thank you for this post! This is the closest I’ve seen anyone come to my approach. I’ve tried making a “normal” budget, but with the wildly fluctuating income and varying expenses I have right now, it just doesn’t work. I buy stuff when I need it, and pay close attention to where my money is going, making sure to have a good cushion. That works for me!

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