To Budget or Not To Budget
A key division between personal finance/Mustachian bloggers like myself is whether or not one keeps a strict budget.
Some bloggers keep excellent budgets. The Goblin Chief comes to mind, as does The Barefoot Budgeter. Both account for every penny and The Goblin Chief does a particularly impressive job of keeping set-aside funds for a variety of categoires. The other school of thought is, essentially, “just spend as little as possible.” My favorite examples of this approach are Frugalwoods and, of course, Mr. Money Mustache. These people track their spending, but they don’t sit down and draw up a list of how much money they are allowed to spend in each category. For the record, the Frugalwoods family and the Money Mustache family both practice a level of fiscal discipline to which I can only aspire.
I tend to embrace a hybrid approach. In most categories, I simply try to spend as little as possible and choose carefully where my dollars go to make sure each purchase is really enhancing my life. I do, however, set a goal for my grocery expenses that I try not to exceed. (The folks over at Planting Our Pennies seem to have a similar approach, albeit with a much larger amount of income to work with.)
No approach is “right.” In general, I think keeping a strict budget is advisable if you
- have a very limited income and limited savings, meaning that a slip would mean debt; or
- have had trouble controlling your spending in the past, such that you need to figure out a “reasonable” number and practice limiting yourself to it; or
- just really like budgeting.
None of those things apply to me. I have two other reasons that I don’t budget:
- Mr. FP will not keep to a budget; and
- I have a bad tendency to live up to the budget.
Years ago, we experimented with each having a set amount of personal spending money each month. Mr. FP didn’t always arbitrarily limit himself, and I would up buying things I didn’t necessarily need or splurging on edible treats just because I could. To be clear, Mr. FP is generally a frugal fellow. But in October, for instance, he went out and spent over $400 on coats, and no budget would have stopped him. He wanted new coats, he researched them carefully, and he wanted the best damn coats he could get. Now, I might have objected to this, but the two coats he was replacing dated to approximately 1997. One was a delaminated raincoat, and the other was one of those giant puffy Starter jackets popular in the era. If he gets 17 years out of these, too, I will consider it money well spent.
Grocery money is a separate issue more amenable to budgeting, I find. One’s needs month to month are more similar. And my goal amount is so low, there is no danger of my spending up to it. I’ve always been over it, but I keep trying! “Budget” isn’t even really the right word, because I always keep buying groceries when I run out of grocery money before I run out of month (I do, however, keep it minimal—I stop buying luxuries like almond milk and we eat more of our cheapest meals, like black bean burgers and homemade pizza).
Do you keep a budget? Why or why not?