You Do NOT need a budget and here is why

rdquinn

April 1

Everyone needs a budget. A budget is sure to improve your financial life.

Nope!

Budgets waste time, create stress and mislead. A budget is nothing more than a bunch of numbers on a spreadsheet you create and update periodically. A budget is a flawed crutch for those who can't make sound financial decisions.

Thinking a budget will help you financially is like going to Weight-Watchers meetings and expecting the pounds will come off without further effort.

Future retirement budgets are especially interesting. Can you project your expenses 20-30 years into the future? You can't, nobody can.

Don't get me wrong. Knowing what you spend is important, but only when you have a conflict between net income and spending. If you end up a month or year with insufficient funds, it's time to assess spending, but a budget still won't help.

When I read the reasons for a budget and what it is supposed to do, I laugh. Some of the reasons imply the budget can make logical decisions for you, change your spending behavior or provide information you already know - assuming you pay the slightest attention to your finances.

Are you going to check your budget before every purchase, I doubt it. Do you need a budget to show what you can save? I hope not because saving always comes first and thus determines what you have to spend. If you make a budget and let it tell you what to save, you are in big trouble.

An article from In Charge Debt Solutions lists what a budget can do.

• Budgeting Can Help You in an Emergency

• Budgeting Can Help with Retirement

• Budgeting Can Help You Fix Bad Spending Habits

• Budgeting Gives You Control of Your Finances

• Budgeting Ensures You Only Spend What You Can Afford

• Budgeting Can Improve Family Life

Budgeting Can Reduce Financial Stress and Improve Mental Health

That is quite a list.

A budget won't fix anything, control anything, especially you, won't ensure anything and may well increase stress trying to meet your numbers each month. It sure is unlikely to change your spending personality. I read somewhere that without a budget it's easy to spend more than you plan. Why is that?

What I am saying in the short version is save first, never pay credit card interest, make sure you have an emergency fund and live within your means. No budget involved, just be financially prudent.