Do you even budget?
I have a confession. I don’t budget. Or not really. I have tried. Multiple ways. And I am not trying anymore. Here lies the story which tells why.
When you get… “financially confused”, start digging the internet and end up at personal finance blogs this is the first thing they “tell you”.
-Do you have a budget?
-What on earth, you should have one. Go, do it now.
So I did and went through several phases before I stopped doing it.
Inspecting my legacy
Thinking of budgeting I recalled my childhood memories about the topic. My parents and grandparents had very different approach both for life and finances.
As I mentioned in this post my maternal grandfather was a “gastarbeiter”. When he became retired he was well-off by local standards. I know that he did no budgeting. With just mindful spending he was going good and he was able to support his family. I think the long years of living abroad taught him to living frugally.
My fathers’ parents were/are real hustlers/entrepreneurs running a very small family business. They were obliged to track everything to know where they are financially. I can still see in front of my eyes my granny writing line after line, page after page full of numbers, names and comments. Despite all of the hard work, they were just mildly successful.
When I was a kid my mother was functioning as a stay-at-home mom and my father was the breadwinner factory worker. In the fading years of Yugoslavia, we were a financially stable single income family. My Dad received some of those leather binding booklets with his employers’ logo every year. It was my mothers’ duty to fill up these booklets with valuable information about where the money goes. And she did this fanatically. She had a system which for any other mortal human being seemed a mixture of an account statement, a flow-chart, and pieces of the matrix. Only she was able to decipher the information, but until it worked nobody asked a question.
In my teenage years, I wasn’t in need for a budget. My funds were very limited and I knew exactly how (pizza and beer) and when (weekends) do I want to spend the money. Later at the university, I had a part-time job which provided me barely enough money to cover my transportation, shelter, and food. What left at the end of the month would not impress even the smallest piggy-bank.
But now I have a family with complicated finances so I thought maybe the time has come.
The Pen & Paper phase
Charged with the energy, that “I will do this” bought a new workbook and started to track our expenses. All of them. Every night we sat down with my wife, collected the receipts, wrote down the expenses and the amounts. I was into it and it worked like magic. For a month or so.
Then I wanted to make a summary. By that point I knew some methods doing this, several categorization approaches, etc. Long story short I was working for a while and simply overcomplicated it. I grouped things one way, then another. Multiplied and divided and projected to the whole year. In the end I was just staring at the paper without noticing any useful information.
I felt dumb. No one likes to feel dumb so that was the death of the pen and paper method. I am a coder after all. And a millennial (sort of). And a smart techie guy. Why did I even experimenting with this obsolete method?
The Excel phase
We have a long time love-hate relationship with Excel. I had a lot of interactions with it in my job but still did not became a spreadsheet wizard. I know the basic functions and formats and started to carry over my logic from the papers. Fabricated several versions and finally, I got something working.
Just to turn out, that I am too scattered to keep the spreadsheet up to date. Tried to focus on it for another month. Then I had to admit that this will not work. And not because of the method I follow is wrong, but because I am too lazy to keep things up to date all by hand. Better later than never.
The App phase
Coincidentally this was the time when every blogger felt obligated to review the possibilities of financial tracking and budgeting applications. The app directory at Rockstar Finance wasn’t around by then so I was just trying the ones which came into sight. I had to realize soon that as a foreigner I bump into walls at every major app (Personal Capital, Mint, EveryDollar). Even if I was allowed to register there was no way to connect my foreign account to my profile. So despite the very impressive user interface of YNAB I felt that without the automatic data collection I would not really want to pay for this service. Blaming it again on my country not the apps of course.
I was so puzzled that I started to write my own application, which can process the data I can copy from my e-bank window. Before you ask, yes, we are so technically backward that there are banks with online banking which lacks the functionality to export your data into any readable format. Yeah, I know, deal with it.
So I worked on it for a couple of hours and I realized that processing the data is cool, but to have a proper application it would take more time. Much more time. This is a good path and an interesting project, but currently not having the sufficient time resources I had to put this on idle.
By that time accidentally bumped into Chris’s blog and his pet project, Thrifty. Registered and started to check the logic and the functionalities. I was amazed, it has a very good user interface, it is simple, knows what you need and nothing more. It would have been perfect. But you know… I am lazy and will not fool myself again that I will enter every transaction by hand. So what does a perfect gentleman do in a situation like this? I tried to delegate this task sugarcoated to my wife. And that was the moment when she asked the question which brought my “aha moment”.
“If I do that and you will see everything in the app what would that change?”
I wanted to say something smart, but I just said “nothing”. She just smiled and continued cooking. No more words needed. We are together for 15 years now, but she can still surprise me with her wisdom. Fortunately, she is the smartest and most rational when I am dumb and overcomplicating things. That is true in reverse too, so I guess that’s why we complement each other perfectly.
To justify my answer I have to look back on my upbringing again. When you have limited funds you learn how to live frugally, how to save when you can and how to be intentional with your spending. Most of the time I ask myself when buying something if we really need this? Bigger expenses are usually postponed by weeks or months while waiting for a good situation. So I had to realize that we don’t have huge spending issues and we are in control with our money most of the times. This is a good feeling 🙂
If you are anything like me Mick Dundee (besides McGyver and Michael Knight) was one of your childhood heroes and this video is not unknown to you (maybe it is irrelevant but wanted to include).
Nah, I don’t need a budget. I have a system. But that is a story for another day.
Now you probably ask
“Hey man this post is a mess, what is the conclusion?”
My answer is
“So is my budgeting history. Do I say you shouldn’t have one? Nooo. What I say is you should know if you need one or not.”
What do you think? Can I be right? Share with me in the comments!