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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.

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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. 

Money tools & resources i recommend

Chime (for saving) works by starting a spending account (takes 5 minutes) and opting into the automatic savings plan. (Learn more about getting started with Chime).  Every time I use the Chime Debit Card it rounds up my purchase to the nearest dollar and puts in in savings. Right now they also offer a double round-up bonus on those savings. All those withdrawals add up over time. Chime is free to use, with no monthly fees. With Chime, you end up saving money without having to think about it.

Qapital (for building savings & reaching money goals) Qapital can help you reach savings goals. Once you have the Qapital App installed and a bank account (or in my case three) connected you set up a goal or goals.  Then you set savings rules for each of your goals. For example, I have a round up to the nearest $2 rule, a guilty spending rule -when I buy Dominos. Qapital is free to useBonus, when you use my link you'll get $5 after your first savings.

Qoins (for debt repayment) When you sign up for Qoins, you connect your bank account and then spend as you normally would. Qoins will round up your purchases to the nearest dollar and put that change towards an extra debt payment. Learn more on How Qoins Can Help You Pay Off Debt Faster

SoFi (for refinancing) If you have private loans or your debt to income ratio allows, consider refinancing with a company like SoFi. Learn more about what it's like to refinance with Sofi. Refinancing my bar loan with SoFi ended up saving me over $1,000. Use my link to refinance your student loan and you'll get a $100 bonus.

Liz

Liz is a blogger helping people with personal finance and working for themselves. She shares her own journey to debt freedom and helps graduates dealing with above average student loan debt on her site, Less Debt More Wine. She currently resides in NC after calling Massachusetts home for nearly a decade.

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