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Bad Budgeting

I am aware that managing a budget is not my strong suit. I am fully committed to enhancing my skills and devising a budgeting strategy that perfectly suits me. While I have struggled in the past, I am determined to set realistic goals and hold myself accountable for my spending. I refuse to let my limitations define me. This gives me confidence that I can learn to manage my finances effectively.

I read an article (on Life Pro Tips on Reddit) that said after you set up your budget, you should revisit it every six months. On the face of it, this sounds like a good idea, and if you have discipline, it should work. However, in my opinion, this kind of tinkering could easily lead to lifestyle creep.

For those that have not read my thesis of lifestyle creep, let me sum up. As your income increases, lifestyle creep is when your lifestyle oversteps that income inflation. Instead of saving more, many folks simply spend more, and that isn’t good. Controlling your spending is the key to stopping lifestyle creep.

Bad Budgeting and Lifestyle Creep

How can adjusting your budget every 6 months lead to lifestyle creep? Simple, that is the definition of lifestyle creep. Think of the following rationalizations you might have doing this tweaking.

  • You notice, normally,  you never have enough cash, two days before you get paid. You just got a 5% raise, you decide to not increase your saving. You should have enough money those last 2 days. This is the prototype for lifestyle creep.You should increase your savings level by 5%, and figure out how to spend less. Don’t treat the symptoms, cure the illness.
  • Your income has increased by $350 a month, and that is precisely how much you need to buy a car (on a 7 year term). This equates to adding a $4200 a year anchor to your life. This tweak could cause other ripples in your budget tweaking, which will sink you financially.
  • Thanks to a bonus, you now have a 5% down payment, and at current interest rates you can afford to make the monthly payments on a mortgage.  If you can’t tell all the things missing from this, you need to get help.


If you have intestinal fortitude and can avoid rationalizing spending too much, then this idea might be a great one. For others like me, it is a cautionary tale. There are still others like Michael James who just don’t really need a budget, and good for them! Poor shmucks like me, do need some financial guardrails in our lives.

Feel Free to Comment

  1. I’m also not a budgeter but I am a tracker. One thing I did do, however, that is a bit like a budget is create savings for things I wanted to spend on. This something from Ramit Sethi’s earlier advice. I’m not up on his current stuff. Basically, if you like spending money on X, say clothes and that’s one area you might wreck your monthly budget you can pre-reserve money for clothing each month. Then you look and see, ohh I have $200 in the clothes bucket. Then you can spend that money without guilt because you put it aside to spend on your chosen category. For some reason this reverse way of thinking about budgets is more appealing to me.

  2. I always worry that saying I don’t need to budget will influence the wrong people. The proof is always in the final financial results. If you’re saving 20%+ of your take-home pay without building any debt, and you’re doing it without a budget, there’s likely no problem. But if you just have a bunch of excuses for why you’re not saving any money right now (or worse, you’re not sure how much you save or whether your debts are growing), then you likely should be budgeting.

      1. Well, accurately logging all spending is a huge first step. Just adding up all costs in each category causes some people to change their habits. But, again, the proof is in the final results. If you log all your spending but still have spend too much, then you need to do more than just log spending.

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