You Might Need a Budget If…

Does anyone still use calculators?

To budget or not to budget? In my last post I described Why We Don’t Budget except once a year. A slight misunderstanding of budgeting could lead people to spend more out of habit; however, it doesn’t mean budgeting is a useless tool that should be avoided by all. You can’t throw the baby or the budget out with the bathwater. Yet many people “budget” but are always broke or spinning their wheels financially. 

So let’s bring some fun to the budgeting dilemma by exploring signs of whether you need a budget or not. Disclaimer: I’m not a certified financial professional or a comedian.

You might not need a budget if…

  • You have gum recession from brushing & flossing your teeth too much. (Um, yeah, that’s me.)
  • Your idea of a wonderful date is hiking and drinking water.
  • Your favorite foods are oatmeal and peanut butter.
  • You’ve been called frugal, thrifty, a tightwad, or penny-pincher.
  • You spouse throws away your favorite clothing behind your back.
  • You’re an engineer who loves optimizing everything.
  • Your last impulse purchase was clothespins.
  • You hate the mall.
  • You check your online accounts every day.
  • You can anticipate the answer on every one of Dave Ramsey’s radio show calls.
  • Your spouse has to tear you away from Excel to watch Shark Tank.
  • You are proud to still be wearing shirts from high school.
  • You know how much your average monthly utilities cost.
  • You have a natural aversion to spending.
  • You have a natural aversion to debt.
  • You “pay yourself first.” Savings, investments, and giving are automatically deducted from your checking account or paycheck at aggressive rates.

You might need a budget if…

  • You floss once a month, whether you need it or not.
  • You have consumer debt.
  • You need a good excuse to tell your spendy friends no.
  • You don’t have a peanut butter sandwich in your bag at all times.
  • You have a hard time remembering prices.
  • You were born with a case of wanderlust.
  • Your last impulse purchase was a piece of clothing or technology.
  • You don’t know how much you spend on groceries or gas.
  • You love the mall (or Target).
  • You’re excited to get a big tax return so you can pay some bills.
  • You are proud to be wearing clothes from the consignment shop.
  • You’re pretending to be frugal by finding discounted ways to increase your lifestyle.
  • You’re not investing at least 15% of your income.
  • You’re experiencing lifestyle inflation, where your expenses always seem to outpace your income.
  • You have emergency savings, but not enough to weather a 3-6 month unemployment.
  • You want to be more generous (don’t we all?).

You definitely need a budget if…

  • No amount of dentists are ever going to get you to floss. (J/k this is not relevant.)
  • You think your Starbucks Rewards card is saving you money.
  • Your consumer debt is growing.
  • You live paycheck to paycheck.
  • Your plan for emergencies is your credit card.
  • You don’t naturally have a memory for numbers, beyond your age and phone number.
  • Your last impulse purchase was a car.
  • You don’t know how much your monthly rent or mortgage payment is.
  • You are proud to still be wearing clothes from last year’s trends.
  • You are not investing enough to receive your full employer match.
  • You never have any money left to give.

There’s no shame in needing a budget. In fact, we should probably be ashamed of writing a financial blog while not budgeting. Or of being so naturally uptight that we don’t need one. You have to find out what works for you. Just remember these cautions when it comes to budgeting:

  • A budget is more than a list of expenses. It should include “paying yourself first” by saving and investing. Actually, we prefer to “pay God first” by giving a percentage of our income to our church and some charities. But next we immediately send money on its way to our index fund and early debt payoff. You might put money in savings for emergencies, your next car, a vacation, next Christmas, or any other special expense that you can (or can’t) anticipate.
  • A budget is not a license to spend. Do you have blow money budget lines (a.k.a. Ugly Christmas Sweaters)? Do you really need all that blow money, entertainment spending, or clothing every month? If you budget it, you’ll likely spend it. Why not try to see how little you can spend, instead of asking how much you’re allowed to spend?
  • The goal of budgeting is not to avoid “going over budget.” Sometimes those BS lines exist because people don’t want to go over budget. Their solution is to overestimate and over-itemize. Keep it simple and budget as few categories as you can, so you can actually keep track, and so that you don’t give yourself reasons to spend when you don’t need to. The goal of budgeting is to get your money where you want it, not to avoid going over. Rules, like budgets, are made to be broken. Life happens, you meet unexpected expenses, but if you’re meeting bigger financial goals you’ll be better equipped to weather these blows.
  • Remember to plan NOT to spend. Pick a category in your budget and look at it through this new lens, asking how to optimize that expense. Challenge everything, as J. Money suggests.  Just because you’re always paid XXX for food or electricity or your cell phone doesn’t mean you always have to. For example, we used to budget for firewood, but now we’ve found ways to stock up for free, and this also reduces our winter gas bill. Decide if there is a step you can take to reduce expenses. Take it one line at a time so that you don’t get overwhelmed or quit. We’ll share some tips on areas like utilities, entertainment, and more in upcoming posts.

Lastly, choose a spending strategy. We prefer to automate as much as possible, using “frugal autopilot” a la the Frugalwoods. Others prefer the hands-on regulation of cash envelopes recommended by Dave Ramsey. Whatever you decide, be sure to track your progress for an objective assessment of how effective the method is for you.

For more on our philosophy of budgeting, check out Why We Don’t Budget.

What other questions or caveats would you add to help someone decide whether they need a budget? 


29 Responses to “You Might Need a Budget If…”

  1. Ernie says :

    I definitely fall into the “you might not need a budget if…” category, but I still religiously keep a budget (YNAB all the way!!!!!). The budget is what keeps me on track. It’s what allows me to create a plan for my money. And it’s always evolving. I love knowing that I’m 23% of the way to my goal for vacation money. Or that I have $12.45 in my coffee fund. Yes, I’m a nerd…I know this 🙂

  2. Hannah says :

    You definitely need a budget if you and your spouse don’t naturally handle money in a similar fashion. Rob and I were decent with money before we were married (or at least he was a great saver, and I made a lot of money), but I like to move money around among accounts, consider tweaks to an investing strategy, etc. whereas he’s very set it and forget it.

    Over time, our styles have converged somewhat, but I think it’s fair for us to assume that budgeting will persist for years to come.

    • Kalie says :

      Great point about the interplay of spouse’s personalities. We seem to complement each other in that area; Neil loves to handle the investing and tracking bigger-picture goals, while I’m good at keep our expenses down. And we find it easy to talk casually about these areas rather than needing a budget meeting, but I know that wouldn’t work for all.

  3. Mike says :

    Love it! This is great advice and a really fun way to explain a tough “fine line” concept that’s unique for all of us. Awesome!!!

  4. Laurie Frugalfarmer says :

    LOL, all of the above, almost. 🙂 We are reformed spenders who have turned into anal, spreadsheet-loving frugalmaniacs in order to dump paycheck-to-paycheck living. On our way from definitely needing a budget to survive to not needing a budget at all because we spend next to nothing. What a crazy place to be!

    • Kalie says :

      That’s great! Although the real goal is certainly not to graduate from budgeting, it is a great way to know you are making huge progress. Congrats.

  5. Abigail says :

    Well, since I’m in the first category and Tim is in the second one… We need a budget. But we keep it loose. While I’d love to have more of a “how little can we spend?” outlook, it often does become, “What can we spend?” Because I have to indulge Tim somewhat. He’s come a long way in tamping down his spending.

    Lately, he’s gotten into playing pool — I’ll be doing a post on *that* fun wrinkle soon enough — and he can tear through quarters like crazy. And when Tim does something, his ADD brain demands that he DO IT ALL THE TIME. So we’ve already had a couple of talks about how I budget for an average of $50/day — and that we can’t spend exactly up to the $50 mark each day. Because some days we’ll need groceries AND gas, or we’ll have a co-pay and something else.

    We’re working on finding a balance among his desire to play a bunch of pool to not be bored, my desire to not have him spend too much and my desire to get him out of my hair for a couple of hours a day. Never a dull moment, eh?

    • Kalie says :

      Having spouses in different categories definitely points toward needing a budget. I think it’s great you take Tim’s needs into consideration.

  6. Our Next Life says :

    Like you guys, we aren’t budgeters, but not because we are as naturally frugal as you (we aren’t!). More because we saw a budget as a license to spend all the money, and we’ve found much more success through automation and living on what’s left (not much). I almost think budgets can be an important step in a person’s financial evolution, from big spender to big saver, with budgeting as kind of a step along the way. It IS useful to get a handle on where your money is going, to a budget can be helpful for building that understanding and starting to make some decisions to prioritize what’s worth it to you to spend on. But once you’ve had that aha moment and decided to spend only on what’s important to you, the budget is no longer necessary. (Or, if you’re just frugal and a champ flosser to begin with!)

    • Kalie says :

      I’m glad you had that aha moment and have been able to move away from your unhelpful ideas about budgeting. I also agree that whether you budget or track spending, it’s so important to objectively see where your money actually goes.

  7. DC YAM says :

    Haha nice post Kalie. I liked this one in particular: “You think your Starbucks Rewards card is saving you money.”

  8. Tonya says :

    I definitely still need a budget just so I feel accountable to something. For me sets me up for better success than when I wasn’t budgeting. And I’m one of those weird people who thinks it’s kind of fun. BTW, I also love oatmeal and peanut butter, especially together!

    • Kalie says :

      That’s wonderful that budgeting has brought you success! These posts are definitely in part for those who can’t understand why their budgets aren’t working. And I agree oatmeal & PB are good together, or separate!

  9. Jen at Frugal Millennial says :

    Hmm well… according to these lists, I don’t need a budget but my husband does. I guess that means we both do. 😉

    • Kalie says :

      Yep, that seems to be a common theme, and it’s certainly important to be unified financially and otherwise with your spouse!

  10. Prudence Debtfree says :

    According to your questions, before we started our journey out of debt, I fit into the “Definitely need a budget” category. Now, I fit into the “Might need” category. The naturally frugal and the learning-to-be-frugal (because we’re not naturally that way) are so different! It’s good that you realize that although you don’t benefit from a budget, others can. Your notes of budget caution are bang on. I tend to think, if there’s $30 left in a category close to the end of the month, “Oh good, I can still spend spend $30.” I’ll work on that : )

  11. Melanie says :

    Ha, this is great! I don’t budget per se, but I save first and check my accounts daily. I try to limit my fun money by using cash.

  12. Marko Zupanic says :

    It’s a great post. I like this awesome list for budget 😉

  13. Cat says :

    Awesome post! I guess in some ways I’m on the line between categories, but we definitely still have a budget. We like to have a budget so we have a plan in place to prevent some of the things you mention and so we know how we want to spend our money instead.

  14. Amy says :

    I have the same gum recession problem, check all acounts daily, love Excel, and can tell you how much each utility cost every month – but I also love Target. Am I screwed?? 🙂

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