that is the question.
I get into many heated discussions over budgets. I maintain they are stressful and accomplish nothing. Others feel a detailed budget is essential.
My view is that once taxes, perhaps payroll deductions and saving – yes, saving always first – are taken from gross pay your ability to spend, your defacto budget is set for you, there is nothing more to spend … unless you go into debt.
If you get to the end of a pay period and money has run out, you look at your spending and see what must change. Do that for a few pay periods and you are back on track. You may not be happy with what you can’t spend, but that’s your reality.
Or, you seek a way to generate more income.
What you put on a spreadsheet for a budget, must be dictated by the net income supporting it, so does each detailed item matter? Chances are you know what you spend on the basics like housing, transportation, utilities, insurance, food. Just about everything else is mostly discretionary, so why budget? If you don’t have the cash, you can’t spend it.
We are assuming here that there is no unpaid credit card balance at the end of the month. If there is you are living beyond your means. Unplanned car repairs throw you for a loop? That’s why there is an emergency account to tap if necessary.
To help with the allocation of funds, try the ABC strategy with various bank accounts assigned for specific purposed – a less stressful, automatic way to manage spending.
Yes, this will work at just about any income level.