Budgeting, Shmudgeting: Is Budgeting for the Birds?

Do you hate to budget? Many people do. The very word “budget” makes them chafe as though they were being physically restrained. Others are huge budgeting fans, assigning every dollar a name (a la Dave Ramsey) and planning out their spending for the month with glee.

Then there’s me. I do have a spending plan, and I know how to budget, but realistically since I pretty much do the same thing every month anyway, I don’t give it a lot of thought. It also helps that my fixed expenses are very low, so I always have “extra” money to work with. (Unlike a few years back, when I basically had no money coming in and higher expenses.)

The long and the short of it is that while I’m a huge believer in the benefits of budgeting, if I had to pick a camp it’d be more the budgeting, shmudgeting one. That’s pretty much because I’ve automated my budgeting, though — so it doesn’t seem as though it’s something I’m actively doing.

Which is nonsense, of course.

What I really do is automatically send my money to a bunch of places, and then do whatever I want with the rest of it. As a result, I get the benefits of budgeting while enjoying feeling like I’m not. Here’s how it works.

Pretax budgeting

Pretax stuff is up first. Of course, I have the usual stuff (taxes, FICA, and insurance) taken out of my check pre-tax. I set aside money for retirement pre-tax too. This means I have money sent to my 401K and my Roth 401K before I get my check. It ends up being a pretty big chunk of my check (because I’m behind on retirement contributions and trying to make up for lost time.) Then of course, the rest of my check actually goes into my checking account and is then mine to distribute.

After tax

The first thing I do when the money arrives in my account two times each month is send a chunk of the money to our joint account. (If you haven’t guessed, my husband and I have his, hers, and ours accounts.) That money then gets distributed to cover all of our joint bills, which includes things like electricity, groceries, internet service, our house payment, property taxes, and homeowner’s insurance. Previously, that money would have also been sent to various savings accounts for things like travel & appliance repair. But since we’re putting so much energy toward getting our house paid off, a big chunk now goes toward our mortgage instead.

I have a good-sized emergency fund now, but while I was building that up, that was next on my list to contribute to like clockwork.

Then come my individual bills which lately are mainly things related to my business. But it also includes things like car insurance and various expenses for my son. After that, it’s all fun and games — things that I want to do; like going out to eat or sending extra money toward our mortgage. (Yes, to me extra to the mortgage is fun. I love seeing that balance go down.) And once that’s done I’ll move travel back up to top of the list of fun.

Organized, but not restricted

This all means that I’m essentially organized (because everything goes into the appropriate budget “bucket”) but that I still feel like I’m free to do whatever I want with my money. Of course, you can feel equally free to do whatever you want if you write out a new budget each month. Getting what you really want is the whole point of budgeting. But this is a way that feels freeing to me, and allows me to do it all pretty mindlessly after the initial set up.

And isn’t that what personal finance is all about? Managing your money in a way that works for you and allows you to reach your goals? I’m thinking so.


  • I agree. We have a budget, but it is more to make sure bills are paid on time. We don’t micromanage (this much for entertainment, this much for cars, etc). We do have a cap that we don’t exceed for grocery trips, but that’s about it.

    It is about control and freedom. There is a way to do it without feeling overwhelmed and controlled by our money.

  • I know that some people having “spending plans” since they don’t like the word “budget”. Either way it’s an action plan, which is a good thing.

  • Yeah, the word ‘budget’ is an immediate turn off for many. They start thinking spreadsheets and piles of receipts and penny-pinching and, oooohhh, all that yucky stuff.

    When I’m advocating budgets I often tell people that the measure of a budget’s value is how well it helps you make better money decisions. Framed and formed like that, people tend to get interested in budgeting, or a spending plan.

  • Allocating your savings towards different areas of your life is the perfect budgeting strategy; you then see at the end of it how much you have to spend on the little luxuries we all love.

    It also enables you to prioritise your savings as well; especially when you’re in a relationship this is ideal so you’re both on the same page.

    When you’re saving for such large investments it can get tiring, but looking for other ways to make your money go further is a great solution.

  • We all budget in one way, shape or form. Most people just do it in their heads and keep rough track of how much they can afford to spend in light of their monthly obligations. When people aren’t good at budgeting by memory, that’s when it’s important to put pen to paper.

    • Unfortunately, I suspect there are a lot of people who don’t even mentally budget — people with no idea how much they’re really spending, or on what…

  • I like your take on not restricting your cash flow; I find when I’m mindful of my purchases – but don’t feel restricted – that I make wiser choices. Put restrictions on me, and I’m likely to rebel just for the sake of rebelling.

    • I suspect you’re not the only rebel out there. Much better to remember that you’re the one telling your money what to do :)