Can you ditch your budget?

by Nick on August 31, 2010

Liz Pulliam Weston doesn’t use a “formal budget” so why should you?  And why do I?  Simple.  I’m not there yet.  Every time we write out our budget we find expenses to cut.  We still do.  It’s amazing.  It also gives us a great “hit list.”

I need to keep track of my spending and savings to get to the point where it’s second nature.  It’s not yet.  And it will not happen overnight.  It will likely not happen for years.  And the “best case” scenario is still probably having a written budget even when we don’t “need” it.  But I enjoy it (my wife doesn’t “enjoy” it necessarily but doesn’t seem to mind – we’re both on board with being responsible with money). 

But I like writing things out.  My financial life is a business.  My wife and I are co-CEO/CFO/COOs of the household.  (My son doesn’t have a title yet.  Maybe he can be senior vice president of toy collections and college savings.  Any other ideas?)

The goal is to get there, though.  Ms. Pulliam Weston provides useful guidelines in this article.  But at the end of the day, you’ll probably realize that there is really a “secret” and “not having a formal budget” really doesn’t mean what you think it does.

Here is Ms. Pulliam Weston’s list of what it takes to live a budget-free life:

  • No credit card debt;
  • Reasonable overhead;
  • Automatic savings;
  • A fat emergency fund; and
  • A good tracking system.

What do you think?  Can you go without a formal budget?  Should you?  If you have to ask yourself the question the answer is probably “no.”

Anyone spot the secret?  Take a look at the article and let me know what you think.  I’ll post my thoughts in a post.

Until then, put your credit card down and slowly step away from the mall!

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