Confession of a Non-Budgeter

A few afternoons ago at work, I was discussing the appropriate amount of money or value of a gift to give at someone’s wedding with my boss and our department’s two youngest employees, both of whom are in their twenties.

It is a good topic for a future post, but what impressed me was that our department's twenty-two-year-old intern showed us the complete budget, down to the very dollar, for his recent wedding.  He further impressed me by showing me a spreadsheet on his notebook computer detailing his and his wife’s monthly budget.

The entire monthly budget took in approximately $3,500 per month, with about $3,400 going out.  He and his wife rent a rather affordable (in my mind) apartment and the remainder of their budget goes to groceries, utilities, two car payments and some other typical items like utilities, insurance and the like.  I did not scrutinize it line item by item, but when I asked about what happens when an unexpected expense crops up, he pointed out to me that they budget about two hundred per month for such things.

I commended him on his diligence and bit my tongue from saying that my family’s monthly budget is over three times as much and that I now shell out over $2,500 alone per month for our son’s college tuition, room and board.  What I told him instead was that I am much older than he is and that when he is my age and has a few kids, it will not be so cut and dry and easy to budget.

I’m all for budgeting, don’t get me wrong.  I would love to have a spreadsheet limiting my family’s total expenditures and investments capped at about ten grand per month, $7,500 to live on and invest and the remainder going to college expenses.

  

But alas and alack, I am a non-budgeter.  More precisely, my wife and I are non-budgeters.

Given enough time, I could easily write a one-hundred page book about the benefits of budgeting and how to do so.  That is because I have read so many posts, articles and chapters of books detailing how to do just that.  None of it is rocket science or multilinear regression analysis, mind you.  At work, I create an economic development budget on an annual basis and am forced to spend within its limitations.  But at home, that’s another story.

I happened across an article by David Bibby of Money Crashers titled “The Anti-Budget: A Less Stressful Way to Manage Your Finances.”  It seems as if Bibby wrote this for Yours Truly Money Mensch, and I had originally contemplated some variation of the title, like “I Am an Anti-Budgeter” or “Confession of an Anti-Budgeter.”  Including the word “confession” is certainly more SEO friendly, however I do not want to consider myself or for you to consider me an Anti-Budgeter.  

The word "Anti" implies that I am against budgeting, which is far from the truth.  I am all for budgeting.  I would love to come up with a strict budget and then present it to my wife.  The thing is, it would cause far more marital strife than me paying a few hundred or thousand extra bucks would be worth.  I would probably end up a very frugal and miserable divorced guy with a strict budget.

You’ve undoubtedly heard of the expression, “Happy Wife, Happy Life,”  a credo that I believe and buy into.  An older, wiser married man who was about my age now told me that on my wedding day back in June of 1996 and I took it to heart.  

My dear, late beloved father truly did not care on whit about money.  He was not only oblivious to this most important means of exchange, but he most likely did not know if he and my mother had two grand in their bank accounts or fifty grand.  The exact opposite of my own marriage, my mother paid our family's bills for the most part. 

Money fights are a leading cause of divorce, so avoiding arguments with my wife is one of the main reasons why we don’t budget.

To me, candles are frivolous and unnecessary, but to others they are not.

Sure, I have groused here and there about what I perceive as overspending by my wife.  But who is really to say that her spending thirty bucks on smelly colored soap products at Bath & Body Works or overpriced candles at Yankee Candle is more or less frivolous than me spending fifty bucks on Uber rides and nearly two hundred bucks on meals and souvenirs in New Orleans in a day a few months ago?

She buys a lot of eBooks on her Nook, but I bought her the device and she reads all of them.  Also, unlike me, she does not have huge unmanageable piles of books everywhere.  My wife always buys me the most expensive lox at the grocery store, but I consider that an act of love rather than overspending.  I strive to be a good provider and a mensch, and she strives to be a good wife, so she buys me the good lox.  Who am I to complain about that?

Come to think of it, I am probably the one who blows the budget more than my wife does.  

Plus, whether we have a budget or not, we are still going to pay for our children’s private music lessons.  We would have still paid for their braces.  Still would have paid for our daughter’s many years of being a member of our community’s dance company.  Although our daughter attends a public high school and is on the poms squad, there is still a rather high amount of extra costs associated with her participation.  If anything, we spend less on most things than most of her poms teammates' families do.

Don't forget her forty dollar-plus horse-riding lessons.  And the years of tennis lessons for both of our children.  Oh yeah, and our son's years of fencing lessons and equipment.  

Yeah, we've spent a lot of money on our kids.

So I do not want to be hypocritical and preachy about how important it is to stick to a budget or how to do so when I do neither of those, myself.

As I shared in a recent post, we had nearly six grand more leave our checking account during the first quarter of this year than came in.  That sure is not what I would call sticking to a budget, and I doubt that you would either.  If we had a strict budget, none of the four of us would have traveled anywhere during the past six months.  No trips to Disney World or New Orleans at all.  Just nose to the grindstone and sticking to our budget.

In his article, Bibby does not really pose anti-budgeting as against budgeting, but describes it as a useful tool that I think we will start using.  He describes it as a macro perspective whereby you group all the micro categories into a single macro category, for example living expenses, dining out, entertainment and savings.

Bibby writes that the key to the anti-budget is that you determine the percentages you want to spend on each of the high-level categories you set, but you don’t try to manage the purchasing decisions within each of those categories.  Makes sense to me.

As someone who does not escrow for our property taxes, I am forced to cough up roughly three grand to the Crook County Treasurer twice per year.  Likewise, I pay our one grand in homeowners insurance in $500 installments every six months.  I pay over twenty-five grand per year to our son’s college.  I pay all the utilities every month and a car lease payment.  I pay off our credit cards to the tune of at least another thousand per month.  To truly budget, we would have to severely limit what we charge on those cards.  Is it too many dinners out or is it braces for two children and books, gifts and groceries charged on our Amazon account?

Per my simplistic index card in another recent post, these matters are not too complicated.  What we need to do is spend less and I must earn more.  My salary of just over a hundred grand and my wife’s of just a bit over a hundred per week simply isn’t cutting it.  But after spending a quarter century running in place like a hamster in a wheel, you kind of get used to it.

Our Anti-Budget

A possible solution to the above problems is what some personal finance writers like to call the “anti-budget.“

With an anti-budget, you don’t plan ahead for the next month, but rather you look back at the month that just occurred and evaluate whether or not your accomplished your goals and if you need to make adjustments this month. Yes, you still have to look over your accounts for last month, but it’s easier to add up what you already spent rather than guess at how much you will spend in the future.

It is not as painful as thinking that you cannot spend an extra hundred on groceries for the last week of the month even though you have five dinners to go and mouths to feed.  It does not mean that you cannot go out with your friends this weekend because it is the last weekend of the month and you already spent your allotted funds for entertainment.

The key to the anti-budget, or non-budget in my family's case, is that you determine the percentages you want to spend on each of the high-level categories you set, but you do not try to manage the purchasing decisions within each of those categories. 

In this sense, the anti-budget offers more of a macro perspective since it groups all the micro categories discussed earlier into a single category. The anti-budget simplifies the process by making it less complex and restrictive. With this method, you can avoid feeling deprived and burdened as you might with a traditional budget.

While I don’t count every dollar or even every hundred dollars that our family spends, it is important for me to have a sense of what kind of spending tends to trip us up. For example, we end up spending too much in my opinion every single month in dining out and groceries.  Then again, I would rather us purchase better food at the store than going out to a restaurant for the same quality items. 

With our son cooking fairly exotic dishes for us at least once a week over the summer, I do not mind purchasing higher-quality ingredients for him to use.  It not only makes for a great dinner, but it teaches him a great lifelong skill.  There's nothing wrong with being a professional musician who also knows how to make a great curry sauce.

Map It?

Of the thousand or more money-related posts that I have read over the past twelve months, one that I found interesting was the Money Map of a Non-Budgeter by HaltCatchFire.

Like my own family, his survives on one income.  My wife does work very part-time, ten hours per week during the school year, and earns about $7,500 per year.  Even though it is such a small amount, I am still grateful for it because she did not work at all for about ten years following the birth of our son who will be turning twenty next month.

I mention this because you can be assured that it was very challenging paying for things on my salary alone as it climbed from just below fifty grand to around twice that amount.  Now, that extra $7,500 brings our household income to a more respectable amount of around 120 K when added to my own.

HaltCatchFire writes that you can imagine it was kind of a financial roller coaster when his wife became a stay-at-home Mom.   He did not go into detail about it, just like I prefer not to at this point.  

Let me just say that there were months when I sent $300 to each of our kids' 529 accounts after making our mortgage payment, car payments, credit card payments and all the other payments required of modern life, sometimes leaving us with only a few hundred bucks to make it though a week.  We lived more frugally than we do now, but I would be lying if I did not confess that we spent plenty dining out even back then.

The below Money Map is by HaltCatchFire, thus I give all credit to him for mapping out his family's finances.  None to Yours Truly.

As a coder, HaltCatchFire does this kind of thing easily.  I am sure that I could create such a map for my own family, but it would take me longer and the minute I finished it I would have a large, unexpected expense that does not fit into any category besides "Other."

Every month I would have thousands of dollars worth of expenses under "Other."  Replacing appliances, paying for new musical instruments (which we are buying one of this July), purchasing gifts, making donations and other things come up more often than not.

Also, I Pay Ourselves First every single month now and have for the past few years.  I want to continue blogging and becoming more successful and publish multiple eBooks, as well.  At some point, I would like to cease working a municipal economic development job.  I do not write "retire" because I do not intend to stop working to earn money. 

If anything, I would like to increase my income following my traditional office-based career full of meetings, emails, Board and Committee meetings, conference calls, trade shows, business visits and the gamut of things that an economic development professional like me does.

Closing Thoughts

The anti-budget should not be a replacement for the traditional budget. If you’re struggling to make ends meet and/or just starting out as a young adult, then you should dive into the muck and get into the nitty-gritty with a traditional budget like our intern does, since the anti-budget will allow you too much freedom. You need that micro level knowledge in order to make the best possible decisions with your money. Once cash flow improves and is not so much of a problem anymore, you can consider the anti-budget.

In my own household, we do not really budget, but consider larger expenditures between my wife and I.  Before we book a vacation, purchase a new instrument for our kids or replace a major appliance, we at least ponder the alternatives together.  We replaced our old stove with a $600 range rather than a Viking range that my best friend or brother and most people we know would buy.  We are going out of town to Michigan for a short getaway rather than a week in France like more than one of my daughter's friends' families are doing now.  We simply do not have the same income that those families do, plus we are focused on paying for as much of our children's higher educations as possible.

Yes, I know that I picked the moniker Money Mensch, which may make you think that I am some kind of Jewish money whiz.  I am not that.

I have never made a budget besides at work and I would blow through it every month if I did.  If you want to read about how to make a budget, just Google the phrase and you can read 571 million articles about it.  You could read a thousand articles per day about it in just 571,000 days, so step to it!

Not so much are confessions of people who, like me, admit that they have not done a budget and do not intend to.  I do intend to non-budget, however, and have taken a liking to the 50-30-20 budget as popularized by Elizabeth Warren.  I look forward to reading more about that method of budgeting, thinking about it and writing a bit about it soon.

Stay tuned!