subject: How To Budget Without Budgeting [print this page] The question of budgeting is a vexed one amongst personal finance writers.
A budget is largely held to be A Good Thing but it's a pain to do, takes a long time and the abandonment rate amongst users is generally held to be off the chart. So why is it so recommended and is there a better way?
Clearly some form of budgeting is inevitable.
From choosing one product over another when we compare credit cards to umming and ahhing in the supermarket aisle over what is apparently an acceptable amount of option when one is trying to buy cheese we're thinking about our budgets and weighing one option against another.
This is budgeting in itself but because it isn't written down it tends to slip under the radar.
Many people will tell you that the only real budget is the one where you sit down and work out - to the last penny - where your money is going, when and how you can change it.
I'm going to suggest that this type of under the radar budgeting is just as applicable to general personal finance.
When you come to compare current accounts this is one of the best ways to start the automation of your personal finance - budgeting by any other name.
Look for online account access - letting you set up direct debits and standing orders when it occurs to you rather than having to wait and then stand in line at the bank and then go direct debit crazy.
Use them to take out money and put it into savings, pay bills early in the month and even pay off other debts. In other words, use your account like the columns of the spreadsheet on that damn budget.
This is also true when you compare personal loans.
For example, look for a loan which can be paid in automatic instalments without you having to remember to do it. This can save on time and let you budget and also avoid late payment fees.
There are two other advantages of this method over having a written down budget. First, it saves having to do two things in one month.
Second, we don't generally need a budget to let us know where our biggest expenses are. We already know and if we weren't afraid to face them in the first place we wouldn't even make a budget.
by: Julia Cook
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