No. of Recommendations: 0
I agree. I have never had success with a budget. I think it is better to decide how much to save and then live on the rest. There was an old saying that went, "Pay yourself first" meaning decide how much to save and have it taken out of your paycheck first. Then live on what is left, because we all have the tendancy to spend every dime we make.

So if you have a company matching 401K then have that directly deducted. If you want to pay down a credit card then make that the first check you write that month, whatever works for you.

Then you pay your normal ESSENTIAL monthly bills for housing, etc. There will be some discretionary left over and use that to buy clothes, go out to dinner, or set aside for a trip, buying lunch at work, cable TV, furniture, etc. (If there is no discretionary left over than you might want to reduce your savings or get a second job.)

The key here is that the "money-wasting" items above bare-bones necessities are taken from what is left over. Hey, if you can't afford cable then buy some rabbit ears. Maybe you can get cable but you have to brown bag it to work all month. The focus is on juggling what is left over for the items that you do not really need - or could wait. (That clothing sale will come around again.)

If the power steering goes and costs $2,000 and your discretionary is $500 per month then you are going to live like a frog for 4 months. Meanwhile, your Net Worth goes up every month because you paid yourself first every month. (A reduction in credit card debt is still an increase in Net Worth.)

Usually what we all do is buy the other stuff first and save what is left over. We go out to dinner, buy that new spring outfit, buy that item because we had a tough week. And surprise, surprise we have nothing left over for savings.

If you pay yourself first then you really don't miss it, especially if it is payroll deducted. You just see your Net Worth going up each year!

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