Everyone needs a budget. A budget is sure to improve your financial life.
Nope!
Budgets waste time, create stress and mislead. A budget is nothing more than a bunch of numbers on a spreadsheet you create and update periodically. A budget is a flawed crutch for those who can’t make sound financial decisions.
Thinking a budget will help you financially is like going to Weight-Watchers meetings and expecting the pounds will come off without further effort.
Future retirement budgets are especially interesting. Can you project your expenses 20-30 years into the future? You can’t, nobody can.
Don’t get me wrong. Knowing what you spend is important, but only when you have a conflict between net income and spending. If you end up a month or year with insufficient funds, it’s time to assess spending, but a budget still won’t help.
When I read the reasons for a budget and what it is supposed to do, I laugh. Some of the reasons imply the budget can make logical decisions for you, change your spending behavior or provide information you already know – assuming you pay the slightest attention to your finances.
Are you going to check your budget before every purchase, I doubt it. Do you need a budget to show what you can save? I hope not because saving always comes first and thus determines what you have to spend. If you make a budget and let it tell you what to save, you are in big trouble.
An article from In Charge Debt Solutions lists what a budget can do.
• Budgeting Can Help You in an Emergency
• Budgeting Can Help with Retirement
• Budgeting Can Help You Fix Bad Spending Habits
• Budgeting Gives You Control of Your Finances
• Budgeting Ensures You Only Spend What You Can Afford
• Budgeting Can Improve Family Life
- Budgeting Can Reduce Financial Stress and Improve Mental Health
That is quite a list.
A budget won’t fix anything, control anything, especially you, won’t ensure anything and may well increase stress trying to meet your numbers each month. It sure is unlikely to change your spending personality. I read somewhere that without a budget it’s easy to spend more than you plan. Why is that?
What I am saying in the short version is save first, never pay credit card interest, make sure you have an emergency fund and live within your means. No budget involved, just be financially prudent.
QUINNSCOMMENTARY 
Dad never stressed the importance of saving for retirement, or for emergencies or anything else. He did stress the importance of honesty and humility. He retired on SS alone, as did my brother and several (most) of my sisters.I never started saving until our youngest daughter moved out on her own, when the wife and I each started funding an IRA. Fortunately, our pension plus SS lets us continue to save and invest for our estate.
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Another name for a budget is a spending plan. Mr. Quinn has a multiple bank accounts that are setup for his main budget (spending plan) categories including a savings category. He puts $ into the various accounts as he receives his various incomes. He refuses to admit he has a budget just because he does not call his spending plan a budget.
How does someone just starting out know if the amount planned for savings is reasonable or not – enough after savings to pay for all the other required spending, even before discretionary spending?
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A budget is an advance plan to spend a certain amount on specific items. Those amounts are intended to be restrictive. I never had a budget. Starting out you save at least 10% of gross income. All spending must fit into what is left or spending must decrease or income increase. It’s not all that complicated or hard. The problem is many people can’t identify actual discretionary spending.
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This is like so many discussions about saving for retirement–building a nest egg- how to pay off debt–hundreds and hundreds of articles and a myriad of ways to do things. I guess everyone does what works best for themselves.
Advice given by brother Quinn makes so much sense and is almost guaranteed to work. But we know losing weight is pretty straight forward for most people; eat less and exercise more. But we are an obese nation thus what is obvious is not so easy to implement.
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My parents taught me to pay myself first and think of savings as my highest priority bill. An automatic budget of sorts, as long as one doesn’t circumvent savings by caring a credit card balance. KISS! (Keep it simple stupid)
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I have never budgeted other than keeping a register of expenses. Always been ahead of the curve. We have a very comfortable retirement. Best advice I ever received: The young you has to take care of the old you. KISS indeed!
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