I'm approximately to admit some thing it's likely quite beautiful for a personal finance author: I don't have a family budget. In truth, I've in no way had one.
Now, this isn't always to mention that I do not preserve music of my circle of relatives spending. I do, and pretty carefully at that. This started out manner once more when Brian and I have been relationship, while we began retaining music of the amount each human beings spent visiting to go to the alternative and splitting the price; later, whilst we set up home tasks together, we started out tracking how plenty every parents spent on joint family charges and balancing out the difference on the the cease of each month. By the time we got married and blended price range, I had determined that having this record of the way we spent our cash have become beneficial, so I surely kept doing it, best with a single column for our costs in location of two. And in the end, I decided to start recording these forms of costs in a spreadsheet, in order that I should preserve song of approaches heaps we spent in each class and tamp it down if it began getting too excessive. So I am very lots aware about in which our cash goes.
What I've in no way carried out is to set any strict, specific limits on how we can also want to spend it. That is, my spreadsheet tells us that ultimate month we spent $202 on meals, but it would no longer say that we are most effective allowed to spend $202 (or $250, or $three hundred) on meals this month. I actually maintain tune of the numbers and notice once they flow up or down via any massive amount, wherein case I (a) look for methods to reduce if essential, and (b) normally, write a put up proper here approximately the purpose.
Now, in keeping with the mainstream finance network, this failure to hold a non-public price variety need to signify that all our tries to store cash and meet economic goals are doomed from the start. The fantastic majority of articles on a way to store (together with one I wrote myself years inside the past) lead off with,
However, I happen to think that our own experience shows this isn't true, at least not for everyone. After all, in all the years Brian and I have lived together without a budget, we've managed to not only buy a house but pay it off, and are now aiming for financial independence and possible early retirement some time in the next five years. So clearly, the lack of a budget has not, in itself, been enough to derail our efforts to save.
Nor are we alone in this. Several other successful individuals—including an investment guru who achieved financial independence at age 37, a finance blogger who accumulated $256,000 in retirement savings by the age of 28, and Amy Dacyczyn of "Tightwad Gazette" fame (all hail the Frugal Zealot!)—all say they have never had formal budgets, and some of them go so far as to say budgets don't work.
Personally, I think that's a bit of an overstatement. Budgets clearly do work for some people, but that doesn't mean that they're an absolute necessity for everyone. In my latest Money Crashers article, I've outlined some of the reasons budgets don't work for everybody and described four alternatives—including our own tracking method—that can work without all the restrictions, or all the paperwork, of a formal budget.
Now, if you already have a budget and you're happy with it, great—you don't need to read this article. But if you don't have a budget, or if you keep trying to make one and can never stick to it, this piece could be just what you need to get your finances on track. And if your finances, like ours, are already on track despite the lack of a budget, yet you still feel obscurely guilty for not having one, this article can help you put those concerns to rest.
4 Budgeting Alternatives to Meet Your Financial Goals
