She Strengthens

Rethinking Budgeting: A Personal Experiment

As someone who’s always been a strong advocate for budgeting, I was taken aback when I stumbled upon a video claiming that budgets are not necessary. The idea that budgeting is a waste of time and that millionaires don’t bother with it sparked my curiosity. I’ve been tracking every dollar I spend for over six years, and I credit my budgeting skills for my financial achievements. But was budgeting really necessary?

The Experiment

I decided to conduct an experiment on myself. For the first time since 2013, I stopped writing down my expenses and stopped budgeting. From January to June, I spent what I spent and saved what I saved. In July, I did an audit of my spending to see what happened.

The Results

1. I was still overspending: Despite my conscious spending habits, I ended up spending more than I made. I was short about $591 in my budget, which meant I was spending an extra $100/month on my credit card.
2. Budgeting is good for mental health: Keeping a budget helps me avoid financial anxiety and provides a sense of control over my finances. Without it, I felt anxious and uncertain about my spending.
3. There’s always room for improvement: Even though I’m not drowning in debt, I can still do better. I learned that I need to continue making smart financial choices to reach my goals.
4. I still had savings skills: Despite not budgeting daily, I was able to plan and save for major expenses like vacations without going into debt.
5. Simplifying my budget: I realized that I was making my budget too complicated. I simplified it by categorizing my expenses into four categories: Wants, Needs, Investments, and Savings.

The Takeaway

Budgeting is not about categorizing your spending or restricting what you can and cannot have; it’s about putting a personal value on your spending. Managing your personal finances shouldn’t be based on an interpretation of a word or its connotation in society. I still believe that budgeting is essential, but I see it differently now. It’s about making conscious financial decisions that align with my values and goals.