You better read this before you set up a budget

The joys of budgeting

If you have seen the Money Pizza you may notice that ‘budgeting’ doesn’t fit in anywhere.  Instead there is a piece called ‘Outgoings’ and that is where I encourage people to consider their spending habits a bit more.  But first, please, let me rant…

I hate budgets

I hated the idea of the 50/30/20 budget – where 50% of your income is spent on essentials, 30% on ‘nice to haves’ and 20% on savings & investments.  That has NEVER fit in to my life at any time.  My housing costs alone are regularly more than 50% of my income – and where is childcare supposed to fit into the mix?  For me, that’s definitely in the essentials bucket.  My budget starts looking like 90% essentials, 10% ‘nice to have and…nothing in investments.  Fuck that.

I hate an itemised budget – it’s like the death of a thousand cuts when I blow a line item.  A terrible feeling of failure would spike me in the guts when I realised I had overspent a line item – again.

I hate the idea of scarcity and lack that a budget represents for me.  I hate waiting until the end of the month to pay myself.

I hate the fact that a budget doesn’t work very well if you have no income.  You can’t budget your way out of poverty.  And when you have no income (e.g. unpaid leave), how are you supposed to keep your spending under your income?  Negative spending?  WTF?

Budgets simply don’t work for everyone – although they are very effective for some people.  I am just not one of those people.


And let’s not talk about budgeting with my husband…

Let’s just say, it wasn’t pretty.  I couldn’t do it.  He didn’t see the point of having a budget if we could manage without it.  We had bumbled along without one for years – and I have to say our slap-dash method worked well enough.  It just didn’t seem like a responsible thing to do, not have a budget.  But I gave up trying to magic up a solution for the sake of staying married.

We now have our own financial equilibrium, and a budget doesn’t feature in our conversations.  Instead we talk about priorities, and consult each other on big purchases.  Our lives are constantly (I mean constantly) changing – and we couldn’t plan more than a month ahead, let alone a year.  We would have to constantly revise our budget – so much so that we have given up.

Instead we have allocated responsibilities of who pays for what – and keep our spending reasonably separate.  We talk about our money management pretty openly, and it suits us both this way.


…because it is a gendered discussion.

Did you know that the vast majority of articles pitched to women are all about controlling their spending – whereas those pitched to men are focussed on investment and growing wealth?  FFS!  Read the May 2021 report here BTW.


Budgets don’t work for me – so how do I manage my spending?

I may be an entrepreneur now with a lumpy income, but my decades as a salaried worker have taught me some things about myself which I now use to manage my outgoings.


#1 – Being paid regularly makes things much easier

I use this to my advantage now by ‘paying’ myself a set monthly amount.  This payment is scheduled to transfer into my spending account on the same day every month – just like a salary.  This way I don’t have to deal with feast or famine behaviours when my income is actually quite lumpy.


#2 – My bank balance will get close to zero at the end of the month, always.

I always had the habit of spending everything in my bank account, and it’s been a really hard habit to shift.  While there’s some serious mindset work I have to do, I’ve used a behavioural set up to ‘trick’ myself in the meantime.

I only look at my spending account with the regular payment coming in – and work with that balance alone.  All my other accounts I either ‘hide’ in my banking app, or make just a little bit harder to access and see.  That way, I am working with one, smallish number only so I don’t feel too flush at any time.


#3 – Because I never have anything left over, I save first.

There’s always something a little bit more urgent than saving some money at the end of the month.  And I found it just so hard to wait until the end of the month to reward myself.

Now, the day I ‘pay’ myself, I have a direct debit which puts money into automatic investments – and I don’t even notice it.  When I started doing this, I only saved £50 a month.  Bit by bit I increased this amount as I realised I didn’t miss it, and now I save a significantly larger amount.


#4 – I replaced my spending ‘zing’.

I learned how to get the same ‘zing’ out of deciding not to spend money as I did spending it.  I did this by transferring some money into a spending pot every time I managed not to buy something (e.g. cooking at home instead of eating out).  It soon became a habit.  And if you want to know the whole story, read the post on How to Replace Your Spending Zing.


How about you?  Do use a budget to manage your spending?  Or is there some other technique that works for you?  Let me know in the comments below!

Feel free to forward this article to a friend – and start up a conversation with them about money!

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