September 1, 2018

The Unbudgeted Budget for Savvy Spenders

Eric Rosenberg is part of the EarnIn Community Contributor program. This Article first appeared on his blog Personal Profitability.

Unless you are a rare finance geek like me, you probably do not find any joy in budgeting. Some people need to look at their budget every day, while others do fine checking in on spending casually a few times a month.

Some People Need a Serious Budget

If you ever have spending problems, you need to treat your budget like a recovering alcoholic treats AA meetings. You may not love dealing with it, but it keeps you on track to do the right thing.

There is no doubt about it that without a budget, some people simply cannot help but overspend. If you fall in this category, do not feel bad. Most people horribly overspend if they do not pay attention. Budgeting is a tool that help you pay attention, understand where your money is going, and save and plan for the future.

If you fall in this category, try to create as detailed of a budget is possible. Plan for small spending categories like haircuts, gas, and break out your grocery spending from your restaurant spending. Granularity will help you stay on track. Have a very small catch all “other spending” category for rare occasions.

Some People Can Survive with a High Level Budget

For some people, budgeting to that level of detail might be overkill. Okay, it is overkill. I fall into this category myself, but I still prefer to budget some items at very detailed level to help me better monitor and control my spending. Every little bit counts.

However, most people in this category do not really need to take the time and effort to build and track a super granular budget. Instead, consider higher level budgeting.

Instead of using categories like fast food, restaurants, and groceries, you could get by with a lumped together food and dining category. Instead of breaking out gas, repairs, and parking, you could just create an automotive expenses budget. A large catch all for everything else is just fine.

If you never find yourself overspending habitually, but still like a guide to keep you on track for your big financial goals, this is the right type of budget for you.

Some People Just Need a High Level Spending Goal

If you are a rock star saver , taking advantage of automatic savings and investments, living within your means, and still have extra cash in the bank account each month, you might not need a high level budget at all.

Instead, you can safely get by with a spending goal for the month. I have friends who do this, even other financial bloggers. I often end up with extra cash in the checking account at the end of the month to transfer to savings, but not always. That is why I prefer to keep a more detailed budget. I would rather end up with more money for savings than scrape by paycheck to paycheck.

Where Do You Struggle?

Where do you struggle with spending and budgeting? Are you a chronic overspending shopper? A restaurant addict? A hobbyist with deep pockets for your favorite activity? Let me know in the comments, or shoot me an email. We’re all here to help.

Eric Rosenberg is part of the Earnin Community Contributor program. This Article first appeared on his blog Personal Profitability.