Why I Have No Budget This Year
Stop over and check out my guest post at Consumerism Commentary entitled Invest in Stocks or Mutual Funds?
MAIN TOPIC: Is it Strange That a Personal Finance Blogger Has No Budget?
After all of my relentless haranging about the importance of saving, budgeting, and managing your money, that I have no budget now may seem strange. In fact, I never would have revealed this here because it’s so counter to EVERYTHING I BELIEVE IN! So what gives? Kevin, over at Invest It Wisely threw down the gauntlet and challenged some Yakezie personal finance bloggers to think critically and play devil’s advocate with our core beliefs. Not one to shy away from a challenge, I decided to reveal why I have no budget in 2010.
This is a bit difficult to justify since I like love budgets. And I particularly like the many variations one can use, like the gazelle budget! The order and discipline a budget or spending plan allows is an invaluable aid in personal finance. In fact, maintaining a budget is a PERSONAL FINANCE CORE BELIEF of mine!
PRACTICAL APPLICATION: How Going Against My Belief in Budgets Makes Sense
Another tenet of mine is to live in accord with your values. That means spend your most precious resource, time, in the way that affords you the most pleasure and reward possible. Let me explain what I mean. In How Trading in a Car Every Two Years Makes Good Financial Sense, I relate the story of a man who values driving a new car above many other material things. He would rather drive a new car than go on vacation. So, even though economically it seems wasteful to trade in his car so frequently, the amount of enjoyment he gets from the car FAR OUTWEIGHS the money he would save by keeping his car longer. Furthermore, he is not living beyond his means in order to drive a new car. (He owns his condo free and clear!)
Personally, El Carino and I do not value driving new cars. We would rather travel and spend money on other things than transportation. That is why our cars are 7 and 12 years old and we travel a lot.
BACK TO BUDGETS!
This year Quicken personal finance software required an upgrade. I had no choice in the matter and had to upgrade to version 2010! I have used Quicken since last century and had over a decade of financial transactions in my personal portfolio. You can imagine, being an investment professional and passionate about finance, my records are very important and well organized. Additionally, in the software, I maintained our annual budget.
Our original Quicken file with all of our historical records was too big to transfer. After many hours with customer service as well as sending my whole file to their “workshop”, my data did not transfer correctly.
I decided to forgo my prior files and start fresh with the 2010 data. After inputting all of the transactions for 2010, I WAS DONE! It took way too much time and energy. I MADE THE DECISION THAT THE ADDITIONAL TIME REQUIRED TO MAKE A BUDGET FOR THIS YEAR WAS NOT WORTH IT TO ME.
I made a conscious decision to go against my long held behavior of maintaining a budget. I valued the time spent on other activities over the additional time required to set up a 2010 budget. Let it be known that I tend toward thrifty behavior, pay off our credit cards every month, have no debt other than our mortgage, and save close to 15-20% of our income each year. After so many years of maintaining a budget, I have a fairly good idea of what we can spend each month. So far it is working out okay. Although, NEXT YEAR I AM GOING TO BEGIN OUR BUDGET ANEW. But for now, the core belief that “one must budget every year”, is not suitable.
Have you ever challenged long held beliefs? How did it work out?