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A while back I had a short conversation with two coworkers about making and sticking to a budget. I said I'd never really done that.
I realize now that that's not 100% true. If I think of a budget as a tool to make sure I don't run out of money for something critical, then I do have a budget. I have had it for years. It's just that it's very simple. It has four categories:
1) Stuff withheld from my paycheck - taxes, health insurance, 401(k) if possible
2) Bills I get in the mail - credit card payments, medical copays
3) Things Rob pays and I pay him - mortgage, property tax, house maintenance things
4) Everything else
Granted, "everything else" is a very broad category. This budget is no good at figuring out "where my money goes" or "where I can cut back". I use Quicken tracking for that sort of thing. But it does do one thing a budget is supposed to do: it prioritizes. See, I use my credit cards for the same stuff all the time: food, vet bills, gasoline, Y membership.* Impulse purchases are almost exclusively cash. So this budget means that I don't spend money on sparkly socks or fine chocolates only to find I don't have enough to keep myself out of jail (taxes) or the grave (medical) or bankruptcy (mortgage). In that limited sense I do have a budget.
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* This is imperfect. Flying goes on the card too, so the prioritization of that isn't great.
I realize now that that's not 100% true. If I think of a budget as a tool to make sure I don't run out of money for something critical, then I do have a budget. I have had it for years. It's just that it's very simple. It has four categories:
1) Stuff withheld from my paycheck - taxes, health insurance, 401(k) if possible
2) Bills I get in the mail - credit card payments, medical copays
3) Things Rob pays and I pay him - mortgage, property tax, house maintenance things
4) Everything else
Granted, "everything else" is a very broad category. This budget is no good at figuring out "where my money goes" or "where I can cut back". I use Quicken tracking for that sort of thing. But it does do one thing a budget is supposed to do: it prioritizes. See, I use my credit cards for the same stuff all the time: food, vet bills, gasoline, Y membership.* Impulse purchases are almost exclusively cash. So this budget means that I don't spend money on sparkly socks or fine chocolates only to find I don't have enough to keep myself out of jail (taxes) or the grave (medical) or bankruptcy (mortgage). In that limited sense I do have a budget.
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* This is imperfect. Flying goes on the card too, so the prioritization of that isn't great.
