You’re not doomed to financial failure if you ditch your budget this year.
- Some people are just not into budgeting.
- With the right strategy, you can ditch your budget and still reach your financial goals.
- Automating your savings can help you reach your goals without stressing your budget.
The start of a new year is a great time to start building positive financial habits. And that’s why people are often advised to set a budget and start sticking to it, or to update an existing budget and update it.
That’s certainly not bad advice. But it might not work for you. And if you decide to ditch your budget in 2023, you won’t necessarily face financial ruin.
Why budgeting doesn’t always work?
The concept of the budget is simple. Find out what you spend money on each month and how much you spend, then compare your total expenses to your take-home pay. If those numbers don’t seem to play well with each other, it’s a sign that you need to cut back on your spending or eliminate certain categories of spending.
But there are a few budgeting issues you may run into. First of all, it can be time consuming and also, let’s face it, a little boring.
Also, it’s not like budgeting is a one-time job. Rather, you should create a budget, but then check back every month to make sure you’re sticking to it. It can be tough.
Another problem with budgeting. Sometimes bills can fluctuate and it can be difficult. Many consumers, for example, saw their food costs rise in 2022 as inflation reared its ugly head.
So let’s say you set aside $500 a month for food, only because of a factor outside of your control, like inflation, that’s not enough to fully feed your family. Should you feel bad about going over budget? That would be a firm no. You have to eat, and sometimes clipping coupons around the world won’t be enough to keep your food costs down.
Plus, budgeting can feel like you’re up against a wall. Say you have $100 a month for entertainment, but you really want to see a concert that will cost you $120 a pair of tickets. Suddenly, you have to scramble to free up $20 from another expense category. It can add an element of stress to your plate and make you feel like you shouldn’t be treating yourself to a show you’ll really enjoy.
That’s why budgeting isn’t the right solution for everyone. And if you’ve tried this before and failed, you can try a different tactic in 2023.
Automate your savings instead
The main purpose of a budget is to help you understand where your money is going so you can reach your financial goals. But it can be done by constantly referring to the table.
Let’s say your goal is to add $6,000 to your savings account in 2023. If you arrange for $500 to leave your checking account at the beginning of each month and automatically go into your savings account, you can reach that goal. And if you can do that while being able to cover the rest of your expenses (essential and otherwise) without racking up debt, then maybe you don’t do it need to emphasize the small details of the budget, and perhaps you don’t do it have to deal with guilt because you spent $542 on groceries one month instead of the $500 you wanted to spend.
Budgeting should improve your financial picture. But that’s not your only option for doing so. And if that just doesn’t work for you, there are other ways you can work toward your financial goals and objectives.
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