To budget or not to budget?


Conventional wisdom for financial planning typically starts with budgeting. But I think budgeting is a painful, unnecessary process that inhibits doing much of anything. What is actually fundamental to financial success is setting priorities and discipline.

  • Save first directly from your pay, never get the money in your hands.
  • Never pay a penny in credit card interest
  • Spend whatever you like with what’s left from your true take home pay. That includes all your basic expenses and payments. Your “budget” is set for you.

“START BUDGETING. Creating and sticking to a budget is fundamental to your financial success. Although budgeting isn’t necessarily fun, it is a critical piece of the puzzle. Within your budget, you can prioritize things that matter and ruthlessly cut out things that don’t.”

“Keep in mind that there’s nothing wrong with occasionally splurging on the things you like. Just make sure you’re saving for these purchases in advance. If you want to take a particular trip with friends, buy a nice bag or pair of shoes, start putting aside the money for it. Luckily, there are many strategies to help you find budgeting success.”


  1. Just kind of curious.

    I know a lot of people who do not balance their check books. They tell me that it is too hard or takes too much time. They just trust the balance shown by their bank. When they are out of money their debt card will be declined so they believe that until they get hit with overdraft fees. Often since they do not study their statements, they don’t even know that they got hit with a fee.

    I personally reconcile every account. I blame it on my newspaper boy days of counting every penny. I still “face” my money because back then, you had too.

    So is not balancing your accounts normal these days?


    1. I couldn’t say about “normal”, but I gave up balancing our checking account over a decade ago. It was a lot of work, and the bank’s figure was always right. So why bother?


  2. I use a free program called clear checkbook and have my military retirement and social security income entered into the account register, out to Dec 31, 2022. With all known payments listed each month and update as things change. With $37,560 in income I can see where every dollar is being spent. I pay car and home owners insurance in full when due. Almost all other expenses are paid with credit cards (for cash back) and then each credit card statement balance is paid in full before any interest will be charged. I was never a saver from age 16 to 64, but now that I have zero credit card debt, I am saving $800 per month out of my income. I will have over $30,000 saved by Dec 31, 2022.


    1. I been using Quicken for years. I do the same thing. It also helps me with all the online banking. I use my cash back as much as possible too. One advantage of using my credit card and Quicken is that it is so easy to see the future bills because they are recurring bills. I don’t have to enter them they just pop up as being due in the future. I don’t have to look in my file drawer to find the old bill. I can look at April now and see what major bills are due, like my annual homeowners insurance bill and for what last year’s amount was. Come April 1st, I can pay in full to taken advantage of the full payment discounts. there are no surprises. I just have to verify the amount because like all things, prices go up.


  3. I don’t budget, either. Never have. We always spent as little as possible and saved as much as possible. That was our method.

    Perhaps that worked for us, because when we married, my wife and I were poor graduate students, living on very low wages from assistantships. We never changed our manner of living after we finally got real jobs.


  4. We never budgeted (too boring) and never paid a cent in credit card interest. It worked out well for us and we retired early. Never gave our kids an allowance either ; we also paid 100% of their educations and they handle their money well . Didn’t do anything the article lists other than made extensive use of the library. It may sound iconoclastic now , but as a young woman entering what was back then almost entirely a male profession, my father advised me to always buy my lunch at work!


  5. You have often stated that you are against budgeting.

    Can you please define what you call allocating money into retirement savings and to pay bills is called?
    Whatever process that you do or use, what do you call it? How does it differ?

    Somehow I don’t believe that you take a stack of bills with the over due bills on top and pay your way through the pile and stop when your checking account is zero to leave the rest of pile for the next paycheck. As a general practice, I don’t see you using a credit card for a purchase and still paying it off 15 months later while charging more each month.

    If you are referring to budgeting as accounting for every penny before and after you spend it, I’ll agree that is excessive and hard to do. However I like to point out you have to know where you spent your money to know where to save money. For example if you are buying $5 coffees or getting tattoos before funding your 401K, that is a problem.

    But you don’t need to account for every penny before you spend it. You need to have some set aside to fun and unknown things too. I have several hundreds unaccounted at the beginning of every month. Pre-covid it might be used to go to dinner, go to a museum, buy a plant or a painting, or spoil a grandkid. But we always have a mental note if we get excessive. It is like using a credit card. Using it is fine so as long as you can pay it off each month.

    On the other hand, I know with five grandkids, there will be Christmas and birthday expenses that I can plan for every year.

    So what do you call the process that you do?


    1. Budgeting is the process of determine in advance how much there is to spend on X,Y and Z. It’s a tedious, sometimes depressing process that then is ignored. You don’t have to know where you spend your money to save. You need to spend within your means. As I mentioned in the post, save first, preferably automatically. Then your net, net income is what you have to spend, it doesn’t matter on what. After a few months it will be very clear how you spend your money. The caveat is that you do not charge one penny that is not paid in full before any interest is required. It won’t take long before what you can’t afford is very clear. Your spending is automatically constrained to your income.


      1. I think I see our differences. I like to know how much to save so that I have money to pay the bills that I know are coming later in the month. I need to know how much to put aside for bills like utilities. Only then will I know how much money I have left to spend.

        The way you make it sound is to do automatic savings and what every is left over just spend. I bet that even you know not to spend all of your money on the 1st of the month doing fun things when you know that you have a $200 electric bill due on the 21st of the month.

        It sounds like that by some method, that you do not call budgeting, you have determined your recurring expenses and automatically put that money aside.

        If I saved first, I would save 100% of my income only to realize that I had bills to pay and be depressed that I kept hitting my savings to get by. Whereas I keep some money in my checking account for monthly bills and then I save some money for quarterly or annual bills. Then I save for the unknown long term needs or wants. My budgeting helps me determine how much to save. I still save an amount for unknown or fun expenses.

        I am no longer saving for retirement, so my savings might be viewed differently than that of a 30-yr-old worker.

        I think we have two different ways of accomplishing the same results. I suspect yours is more viewed from the corporate world of several months of painful budgeting process and thus is “budgeting”. Whereas I look and say how much money do I need to pay for my car insurance, homeowner’s insurance, and property taxes in April? I could take it all from one pension check and eat dog food for the rest of the month or I put a little away each month. My budgeting process is to determine how much I must allocate to pay my expenses and how much I must save to determine my “excessive” cash to spend.


      2. Yes, as I said after a month or so you know your fixed expenses. I have all my basic expenses taken from my checking account or placed on a credit card. I can tell you exactly what my utilities, cable, insurance cost and I have a good idea how much will be left each month. But I don’t spend a penny on a non necessity unless I’m sure it will be paid in full at months even. Even in retirement I still make some savings a first priority taken from my checking account.


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