You DO NOT need a budget‼️

I just finished watching one of many YouTube videos saying to save money you must have a budget, you must use paper and pencil to list and track every penny you spend.


Nobody needs a budget or more accurately, nobody needs to meticulously establish and monitor a budget. You can easily have all that done automatically – assuming you have a measure of self-discipline.

Here is all it takes.

Set up two savings plans – automatic saving plans. One for long-term saving and investing and a second to establish and maintain an emergency fund. At least 10% of gross income for the first (grow that as income rises) and about 3% for the second. In the earlier years when income is lower, retirement savings on a pre-tax basis will minimize the impact on take-home pay.

If you can’t live on this net amount, you must then look to cut spending and or increase income which may mean a side hustle, more OT or a second part-time job. Agonizing over a planned budget is not going to change anything. Even worse, using a budget to determine what can be saved is a disaster waiting to happen.

You now know exactly what you can spend on all necessary and desired spending. It’s you gross pay, less savings, less mandatory payroll taxes and deductions Your budget and standard of living have been set for you, spend whatever you like.

Oh yes, one more thing.

Never start a month with a credit card balance. Before you charge know where the money is coming from to pay the bill. I’d say pay with cash, but reward points and cash back can be useful.


  1. Richard, I know that you are against budgets. I get your point to SAVE10% up front for retirement. Pay yourself first. I get it. But you never explain how to plan to save for those other periodic bills like annual car insurance, or homeowners insurance, and property taxes once you pay off your mortgage. Do you increase your “savings” to 20%, 30%, 50%?

    I use a budget. I know what my bills will be and I have the money there waiting for the bill. Once I put enough money aside, then I have discretionary money to go out to eat or on vacation. How do I know? I have a budget. I do not get a large enough pension to see how much money is left over at the end of the month and call that extra money. I have to make that money last all month. Also, if I have money left over at the end of the month, then I was cheating myself by not living my retirement dream because I was too afraid to run out of money. I am not afraid because I know exactly where I stand at all times.


      1. Exactly. A budget is knowing where your money is and goes, no matter the method use. Those who don’t budget end up in thousands of dollars in debt living paycheck to paycheck with no ideal how they got there.


  2. I was talking with Fidelity investment advisor. I know how much my income is, I know how much mortgage and utilities are, roughly. I automatically transfer funds to a savings and an investment account monthly. He asked approximately how much we spend on food.
    No idea. We do get take out a lot, or meals out. And I don’t track what I spend at the grocer (or Amazon) but I know we spend less than we earn. If the excess builds up in my checking account at the end of the month, I transfer that to the investment account.

    He did point out that our investment income was increasing, so I need to increase monthly tax withholding.

    It wasn’t always this way.


    1. It wasn’t always this way.

      This was no great planning on my part. No magic budgeting trick. It actually hit us both by surprise. (Pleasantly)
      With pensions and SS, we make about the same as when working. When we retired, we still had car payments, minor consumer debts, and a HELOC. We were living, as they say, month to month. As we paid down the debt, I gradually increased automatic monthly investment. The only debt left is mortgage, which is lower than the average rent.

      Here is the big question… Fidelity asked how I felt about the current market. I told him I wasn’t happy about our losses in the last two years, who is? But I consider this a target rich buying opportunity, and will continue to invest all I can.* Am I nuts?

      Our big advantage is, our income is sufficient, so the investments are “for the children.”

      * Mostly index funds with about half in CDs.


  3. I agree that one doesn’t need a budget but I also understand some people don’t have the presence of mind to deal with any numbers for any length of time. For example, I pay off the credit card bill monthly, I know when it comes due. I know the month that our annual car insurance and home insurance will come due. I know the month to pay the annual property tax. We have other annual bills that are treated the same way. All this seems easy for me to remember but for some folks it just doesn’t click. How much do I need when I need it. They then are swamped with credit card bills, utility bills and other payments and no cash on hand. These folks need a written plan of action because the plan of action in their minds doesn’t function as well. Some basics of understanding just how far their money income will go is part of that missing piece. They just pull out the credit card and then wonder why the card balance is out of control. They need a written guide that shows them “no Disney World trip this year, no car trades this year”.


    1. Richard, you have consistently not been supportive of budgets. They work for many people, including my wife and me. I think your personal bias is in full view and it doesn’t serve you well as you are assisting people to ask the right questions regarding their finances. We are one year away from retirement and are meticulously monitoring our spending to determine a useful budget, allowing us to better understand our “P&L” for our household.


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