Frequently Asked Financial Questions: Do I Really Need a Budget?

personal finance | FAQS | money questions | do I really need a budget? | debt | budget

Frequently asked financial questions are questions that I’ve seen pop up over and over again.  I thought I’d take the time to answer them in this new Series. So each post will have a short quick answer to these frequently asked financial questions followed by a longer more detailed answer.

Do I really need a budget?

Short Answer:

Yes, if you find yourself struggling living paycheck to paycheck, then yes a budget would be a good idea. You should know that a budget isn’t about restricting yourself it’s about prioritizing what is important to you and creating a plan for your money.

There are even different kinds of budgeting methods, like mindful budgeting, zero-sum budgeting (YNAB is a great tool for zero-sum budgeting), cash-only budgeting, and balance money budgeting.

Related Post: How to Budget Successfully Every Time

Long Answer:

Sometimes the first step in fixing your money is to ask yourself questions to see what tools would be most useful to you. So, “Do I really need a budget?” is a great question to ask. But, keep in mind that budgeting isn’t always the right tool to fix your money. Budgeting is just a tool and it’s not meant to torture you.

Budgeting is a tool to help you in your finances just like any other tool you would use in your life, like a jack to help fix a flat tire. If your money and finances aren’t what you want them to be then a tool such as budgeting can help you fix your flat finances.

As I mentioned above, if you are always running out of money, living paycheck to paycheck, and at a loss as to where all your money goes, then a budget is a great way to get your money on track. However, if that isn’t the case, if, for example, your retirement fund is not as doing well, or you don’t have clear savings goals or are dealing with other money management problems, a budget might not be your best tool to fix your finances.

If you are short on money for everyday life or short on your money goals, then you should give budgeting a try. If your first attempt at budgeting is miserable then try another budgeting method.

Budgeting Methods:

There are several different types of budgeting methods, like goldilocks and her porridge you just have to find which one is just right for you.

Mindful Budgeting

This budgeting method is not about assigning amounts to various categories, it’s about being mindful and more purposeful in your spending. There is no guilt about your spending, but it does celebrate wins. Cait Flanders has been a long proponent of Mindful Budgeting and has even created templates you can use, that help you to change your mindset about money and budgeting.

Zero-Sum Budgeting

If you’ve ever heard anyone say “give every dollar a job” when it comes to managing your money, then you’ve heard of zero-sum budgeting. What that means is when you look at the money you have to budget, you budget all of it. Every. Single. Dollar. The idea being you don’t spend any of it wastefully because it already has a job to do.

My first experience with zero-sum budgeting was when I started using YNAB (you need a budget), which operates on a few different rules, including “give every dollar a job”. If you want to experiment with zero-sum budgeting, YNAB has a free 34-day trial you can use.

Cash-Only Budgeting

Otherwise known as the envelope method. You take out the amount of cash you are budgeting and put it in envelopes designated for certain things, like grocery shopping, or buying fuel. Once you use up all the cash in the envelope you’re done spending in that category.

It provides you with a hard stop. It works best if you don’t carry your cards around with you so you aren’t tempted to spend outside of your envelope.

Balanced Money Budgeting

Balanced money budgeting is about adhering to spending percentages. For example, a common rule of thumb is that you shouldn’t spend more than 30% of your income on housing. So you would decide the right percentages for you and then assign amount based on your income.

This is a great method to help you know you base income required when you have an irregular income. Obviously, you know how much certain bills will be but your spending on things like entertainment might vary for those months when you don’t earn as much.

Wrapping it Up with a Bow on Top

  • You need a budget if you are struggling with your money.
  • Not all budgets are the same, there are different ways to budget your money
  • There are even great tools out there to help you budget, like YNAB (You Need A Budget)
  • Anyone can be successful with budgeting

If you have any questions about budgeting or there are any other questions you like the answer to, let me know in the comments. 

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