How my budget failed me big time

11 thoughts on “How my budget failed me big time”

  1. I would run into the same problem as you when I had my first job. I never had a budget per say, but I knew my take-home pay and I knew my expenses. What was left over either went to pay down extra payments for student loans or on casino and golf trips with the boys. But now I look at all my extra money as money that can go into my Vanguard account and speed up my FI date!

    1. Yup, totally. You probably look back at your casino and golfing days and think to yourself, “Yeah it was fun, but I’d rather be that much closer to retirement right now”, eh? Me too. My main vice was going out to eat at restaurants as well as all the expensive toys I bought. It was fun, but I’d rather be jobless! 🙂

      Thanks for reading.

  2. So interesting to think about how we’re all taught so differently about money! If one of us had saved up money as a kid over the course of several months in order to buy something, we surely would have been applauded, not scolded!

    We aren’t budget-focused per se, but do what we’ve learned is known as paying ourselves first. Basically we just have a lot of things automated so that what we have left to spend is pretty small, and what we save is pretty big. Our 401(k) contributions come out off the top, of course, but then we have our paychecks split to send large parts to savings accounts that draft to Vanguard twice a month. Also, as you surely agree, just tracking everything is super motivating. Even without a line-item budget, we still never want to cause any of our numbers to get smaller!

    Once we get closer to ER, we’ll have to figure out if we want to start budgeting. Without income streams and the same need to save, we may need a new system. But we’re not at that point yet.

  3. Sounds like a familiar story and journey.
    Budget is indeed money that can be spend, it should not be spend.
    Most of our unspend budget rolls over in bigger upcoming cost pots, avoiding thus to use the emergency saving.
    We still devote each month an amount to the emergency saving. If this pot goes beyond a certain amount, it is used to invest or pay back a part of the mortgage.

    It is good to read there are other similzr people out there.

  4. Interesting way to look at the issue of managing money. instead of ‘budget,’ which has always struck me as a negative approach to managing money, I prefer to manage my money by utilizing a ‘spending plan’ as it more more accurately reflects how I want to direct my money. Whereas budgeting makes me feel like I am forced to allot money for things I would rather not be spending money on, a spending plan feels like I am more in control of how I want to allocate my resources. Of course, savings and investments receive priority in my spending plan.

  5. I can honestly say we have tried so many times to budget and it just never works for us. For me, it’s too time consuming to figure out what category different expenses go in. Also, like you said, I would feel that it was more than okay to spend the money budgeted in an account, because hey… it’s already budgeted!

    Our method of budgeting is usually to pay ourselves first and live on the rest. Right now we’re taking out 50% of our paycheck and putting it aside for savings, debt, etc. and living off a cash diet for anything non-need related. It’s definitely been challenging , but it seems to be working for us.

    With a cash diet we don’t have to worry about whether it’s going to eating out, buying beer, buying coffee, or anything else. Once it’s gone, it’s gone. The thing I will miss though is looking at our expenses over the course of a year to see where our money was going – with cash we can’t do that.

    Great post, love the story too.

    1. Thanks Chris! Good on you for finding a way that works for you guys. There are definitely benefits to a cash-only diet for sure. It tends to simplify everything. I love it when things are simple. 🙂

  6. Hi Steve,

    Here is the most important sentence you wrote: “The key with our budget is balance our needs with our legitimate and reasonable desires.”

    If you can do that, you don’t even need a “budget.”

    1. Thanks Gary. Yup, that balance is critical. Without that, you’re maintaining a budget for no good reason. I was doing that for the first 10 years of my life, unfortunately. Ugh!

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