No disrespect to J. Money, but in the Mad Money house we believe budgets are for the birds. I have spent countless hours inputting guesstimated dollar amounts to be spent in every detailed category in the quest to create our monthly budget. Each month was different, so it wasn’t set it and forget it. Every dollar had a purpose, just like Dave Ramsey likes to spout. Every cent spent was scrutinized to make sure it made it into our personal finance app, Mint.
I bought a cup of coffee? It went into the Eating Out category. Mini Monster needed clothes or a toy…it went into our Discretionary spending category. How ridiculous was THAT category? And, at the end of the month, we would rejoice in the fact that we didn’t go over our categorized budgets. You know what it taught us? It taught us that if there was any room left in any given category that we should spend more! It taught us that budgets are for the birds!
We are following in the footsteps of other great frugal mavens that have come before us (Think: The Frugalwoods). We’re ditching our budgets in exchange for scrutinizing the necessity of each and every purchase.
Newsflash: Eating Out does not routinely deserve a budgeted category when you’re on FIRE.
Look at this embarrassing breakdown. This is a sampling of some of our former, ridiculous categories in any given monthly budget. We used to be as happy as a pig in, well, you know, if we could stick to our allotted monthly budget. These days, we have cut categories altogether in an attempt to trim our expenses, invest the rest, and retire early.
Sampling Of Ridiculous Categories
-Funny Money (This was our Catch All category, including Eating Out)
The Proof Is In The Puddin’
Question: Guess what happened when we allotted $200 each month for Eating Out? Answer: We spent $200 each month on Eating Out! *GASP* Even worse, since we had all this money in all of these separate categories, we would borrow from Peter to pay Paul (old school biblical reference, but it works), meaning we would adjust our Grocery budget down and adjust our Eating Out budget up to accommodate our daily whims…which, by the way, would change as often as we changed our underwear. Oh, the horror.
On The FIRE Track
I’d like to announce that we are now firmly planted on the early retirement path, through Intelligent Design! We’ve gone to some extreme frugal measures to ensure we hit our goals. We cut our umbilical cord to the cable company, stopped spending on unnecessary “necessities” like paper towels and seasonal family portraits (not that we ever did that last thing anyway). We even came up with, what resembles, somewhat of a plan!
These days, we’re spending more quality time with each other without needing to waste money. We’re taking walks together, making crafts together, and even raising insects together! Not a typo. And it is making all the difference!
2017 Update: We aren’t so down on budgets as we used to be. We still don’t use a detailed budget, but we definitely see the value in utilizing one, especially if you’re just starting your financial journey.
What do you think about budgeting? Is it more helpful or hurtful in your financial journey?
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