Sunday, 19 March 2017
Why you don't need a budget
Thanks for visiting.
Many people really like to budget the spending and stay within the budget. Many people cannot stand a budget. I am one of them.
I hate budgets.Tried many times and failed miserably.
Many personal finance bloggers stress about the use of budget to cut the spending. To me, it is time wasted on something you can't really do.
You may want to know, how I have some left over money in my savings.
My family automated some of the expenses though. Like the mortgage: it will be taken from the checking account biweekly. The phone bills are automatically paid by credit cards. The cable is also paid automatically.Then the energy bill, which is taken out at the beginning of the month. the condo fee is also automated. That way, I can avoid any late fees and interest on unpaid bills.
I won't buy small stuff regularly. You might have heard of the Latte Factor: I don't have any spending like that. Guess, I already mentioned about my dislike to wait in line at coffee shop. My family always pack lunch to work. So, on a typical work day, we don't spend anything. There is no impulse shopping during the regular work week. Most of the time we eat home-cooked meals. Sometimes there will be store bought snacks. But they are not from the fast food restaurants, which are more expensive compared to grocery store variety.
My savings are usually moved to RRSP in the beginning of the month, when I get paid, which is once a month. I save 20% of after tax money. Once it is moved to RRSP, you cannot take it out. Unlike TFSA, this money is difficult to take out, unless you are over 65.
Then the remaining has to be used to pay the bills and other fun spending. Fun for us is really watching a movie or two on the TV. Then reading books and watching YouTube. Since there is not much space in the small condo, we cannot own many books. If a new book is going to come, then an old one has to go out. So, library is a great choice. Our library has a great selection on e-books and audio books too.
After starting the blog, and liking the minimalism ideas, our life become more simpler. There is not much stress about money as well. As a result, i can see my savings is growing little by little.
Basically, if you have decided on how much is going to the savings, and take care of it when you get paid, there is no need for budgeting. To live within the balance of the available fund, we need to choose some strategies on spending. The less you spend on unnecessary things, the better. Then you will find enough money to spend on the things that make you happy.