Do budgets really work? It depends. Some people can do it, others can’t. If you’re a detail-oriented person who likes to keep track of things and know where every cent goes, then budgeting may work. But if you don’t like to keep track of things and like to keep things automatic or simple, budgeting may be more of a hassle than a help. I don’t like budgets. They’re a waste of time for me because I don’t buy many things.
I myself do not use a budget. I keep track of my net worth on a spreadsheet and set monthly net worth increase goals every month. I have not reached those goals in the past few months because the market was going down. But now, most of my positions has recovered to where they were a few months ago. I normally meet my net worth goals. It is not that difficult. I waste a lot of money minor purchases such as food. Those minor things do not affect my net worth as much as big ticket items. I just control myself on big purchases and only get things I truly need.
My wants and needs are very limited. I have inexpensive taste and do not care for the latest fashions, gadgets, cars, fashion or restaurants. Who cares about a new car. I don’t. I like my 1999 Nissan Maxima and I plan to drive it until it dies. Why spend 20 or 30 grand plus on a new car that will depreciate faster than anything you will own. That expensive 2 grand plasma is not going to be worth much in a few years too. So why not buy a mid end plasma television for a fraction of the price. That $600 Iphone is now only $400. I just buy what I feel would be useful. I try to only get things that I will use. Moderation is the key.
Increasing your net worth is very simple with or without a budget. You just have to control your spending and try to earn more than you spend. Some books tell you to save 10, 15, 20%. That’s a good start. Save and invest so that you don’t have to save in the future.
