Budgets Are as Sexy as Warren Buffett in a Speedo

(Guest Post by fellow blogger, Kathleen. Who apparently enjoys stirring up trouble ;))

Hi, friends. I’m Kathleen, and my corner of the internet is way across town, at FrugalPortland.com. I have admired J$ from afar (and got a little star struck when I met him at FinCon last year!) for a few years now. His writing is funny, and his advice is sound.

There’s just one thing, though. I don’t think budgets are sexy at all. In fact, I was thinking about the least sexy thing I could think of, and yes, Warren Buffett in a speedo came to mind. Sorry about that!

I don’t budget, at all. I think it’s the wrong way to get in control of your money.

The Problem with Budgeting

Here’s the thing. When a person finally decides to get their head out of the sand and stop spending more money than they’re earning, we want to capture that enthusiasm. Instead, general wisdom comes along and says,

“You want to stop financing your lifestyle? Kudos to you, sir or madam! Now, track every single dollar that goes out, stop doing all the things you’re doing with your money (have we told you how bad Starbucks is yet?) and change your lifestyle completely. Tomorrow. No! Today.”

Then, the person decides that it’s too hard, that maybe they’ll try something else, and holy cow do they need a drink.

There Has to be a Better Way

If someone came to me, ready to change their financial lives, I’d tell them,

“I am so proud of you for realizing that this way of life isn’t sustainable. Here, sweetheart. Have a seat. Get comfortable. You’re going to have to change a lot of things, but the first thing you’ll have to change is your mind. Understand that you can do this.”

Change your attitude about the kind of person you are.

I think you are great. Spectacular, even. You made mistakes in the past, but no judgement here. Credit card debt sucks, but that doesn’t mean you suck for carrying credit card debt. I promise. Don’t beat yourself up. Let’s get this sorted out.

The No-Budget Way to Get Your Finances in Order

Instead of focusing on spending, let’s take a look at how much money you’re bringing in each month. Are you thinking of a number?

Now, let’s look at all your bills, including debts. Like I said, this is a judgement-free zone. You don’t need to make excuses or be embarrassed. Just list them out.

What are you left with when you pay all your bills, plus the minimum payments on your loans?

Great. Let’s work with that.

We’re not going to budget. We’re just going to pay your bills, pay your minimums, then, see what we can do with the rest.

In this stage, it’s important to just STOP using credit cards, even for incidentals. That is what your debit card is for, okay? It’ll keep you from spending more than you have. And that’s an important step.

Beyond Treading Water

Spending less than you earn is the key to getting out of debt, and getting out of debt is the first step toward being in charge of your financial life. You can do this any way you choose. There are shelves of books regarding the “right” way to pay off debt, but the bottom line is this: the math hardly matters.

If getting out of debt were a simple mathematical problem, then we wouldn’t need the experts! Don’t worry about the interest rates. Hey, you weren’t worrying before, why start now? Think about what I like to call the “debt of highest pain” — that one that you are most ashamed of. The one that you continually kick yourself for having. That could be a personal loan to a parent. A medical loan. Anything. For me, it was a credit card. I hated that I had credit card debt. I knew I wasn’t the kind of person who carried a balance (I also had to change my attitude!). I just had to prove it.

So I spent my time, and all of my extra money, making the credit card debt go away. There was a time where both the balance and the interest on my credit cards were lower than my other loans, but that didn’t matter. I wasn’t the kind of person who had credit card debt.

I didn’t have a budget then. I still don’t. I do keep a very close eye on all of my accounts (and would recommend Mint above any other tool out there, just don’t use the “budget” section!) and have a plan for each.

Budgets aren’t sexy to me. What’s sexy is being in control of my money, not having my money control me. And if a budget helps you get in control, then it makes you sexier.

And that’s what we all want, right? To be sexier.

Kathleen writes at FrugalPortland about her path to financial independence as well as ways to save money, live simply, and enjoy the fun things that Portland has to offer. Also online dating.

[Photo by Aaron Friedman / Outfitted by J$]

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  1. Sheri June 20, 2013 at 7:06 AM

    Thanks Kathleen! I appreciate other ways of looking at things. I started with a budget of sorts when I started my route to get out of debt… Now, I don’t have one, I just watch what I am spending versus what I have as much as possible. If I get to a point where I want something big again (a new car, etc) then I will budget for a little while, to make sure I can carry that new expense. Then when I am sure, off to the races!

    JMoney – great guest article *grin*

    1. J. Money June 20, 2013 at 10:32 AM

      Yeah yeah ;)

    2. Kathleen June 22, 2013 at 9:22 AM

      Saving up for goals is the way to go!

  2. KC @ genxfinance June 20, 2013 at 7:54 AM

    That is indeed sexy. I like the sound of it – controlling your money and not letting it control you. Although with us, we still budget. It’s our way of managing our finances, to keep track of everything. And when it comes to change, it must come from within. No matter how much we push someone to change their ways for the better, if they don’t think they can do it, nothing will still happen.

    1. Kathleen June 22, 2013 at 9:47 AM

      I suppose I have a fairly rigid view of budgets. but yes, it’s all about mindset.

  3. DC @ Young Adult Money June 20, 2013 at 7:54 AM

    Did you just legit say “Budgets aren’t sexy” in a post on “Budgets are sexy?” How did this get past the editorial process? Just messing with you, great post Kathleen!

    1. J. Money June 20, 2013 at 10:36 AM

      Had to make sure you were paying attention ;)

    2. Kathleen June 22, 2013 at 9:48 AM

      Ha yeah. I’m a ninja!

  4. cashrebel June 20, 2013 at 8:54 AM

    Great guest post Kathleen! Im certainly a numbers guy and emotions don’t tend to factor into mu financial calculations. But I think you’re probably right that most people aren’t the same way. Most people just don’t want to be seen as credit card debt people.

    1. Kathleen June 22, 2013 at 9:49 AM

      Maybe you’re ahead of the debt mindset.

  5. David Hunter June 20, 2013 at 9:36 AM

    Hmmm… Through some $1000 bills in Buffett’s speedo and you just may have your sexy. Hahahaha

  6. MrsPoP @ PlantingOurPennies June 20, 2013 at 9:39 AM

    I think knowing your accounts and having a plan for each is a type of budget, since your money is allocated in a sense if you’ve got the plan.

    When I was single I operated a lot like you, but combining with someone else, having set numbers that we don’t want to go over just makes it easier for us.

    1. kathleen June 25, 2013 at 2:06 PM

      Cool, that makes sense. I definitely don’t see what I do as budgeting since I don’t give myself limits in categories.

  7. Eric June 20, 2013 at 10:10 AM

    Sorry, but how is 1) listing your income 2) paying your necessary bills then 3) deciding what to do with the rest NOT a budget? Call it a spending plan or “paying attention to your money” or whatever. Prioritizing the use of a finite resource is a budget.

    1. J. Money June 20, 2013 at 10:36 AM

      I was actually thinking the same thing when reviewing it ;) It’s just more of a *loose* budget than a hardcore one. But doesn’t really matter either way if the system resonates with people. Telling people they can manage their money without a budget def. grabs attention!

    2. Kathleen June 22, 2013 at 9:52 AM

      See maybe we have different views of what exactly a budget is. I’ve always heard that you set a limit for different categories and spend only x on groceries and if you exceed x, then you failed.

  8. Kyle @ Debt Free Diaries June 20, 2013 at 10:14 AM

    Love this post! I’m definitely not taking the traditional route to a debt snowball and I’m glad someone else isn’t either. Sometimes we need to focus on the thing that’s stressing us out the most first, then back up and take care of everything else.

    1. Kathleen June 22, 2013 at 9:57 AM

      I think you have to do what works for you. Period.

  9. Jake @ Common Cents Wealth June 20, 2013 at 10:29 AM

    I agree with you to a certain point. I’m a budget fan and I think that they work great, but I understand why the majority of people don’t like them. That being said, your process above is just a very simplified budget. Knowing how much you make and then how much you have left after all of your payments is more than what a lot of people are willing to do, unfortunately.

    1. Kathleen June 22, 2013 at 9:58 AM

      So any time you live within your means you are sticking to a budget?

  10. RichUncle EL June 20, 2013 at 10:45 AM

    Cool Twist on this constant thinking of budgets. I will have to say you are either born with it or not, the sexy budget bug that is. To sum it up spenders hate budgets Savers love budgets and think they are sexy.

    1. Kathleen June 22, 2013 at 10:00 AM

      Huh, I’m a saver and I don’t like budgets.

  11. Samantha June 20, 2013 at 10:58 AM

    Totally agree with Eric.

    Isn’t this just semantics? How is keeping “a very close eye on all of my accounts” and having “a plan for each” NOT a budget? It just causes you to be aware of your spending, and decide before you spend the money where you will spend the money. Thats a buget. And thats what makes it sexy.

    I think you are operating under the mistaken impression (which a lot of folks do) that a budget is somehow put to you from on high, and its very restrictive, inflexible and rigid but “hey, thats budgeting, and budgets suck.”

    I would argue that the “budget”, or spending plan as you might prefer, is your own way of keeping track of what you make, what you spend, and where any extra money should go before its just gone. Thats exactly what you do. Which is what “budget” should mean!

    1. Samantha June 20, 2013 at 11:00 AM

      And for the record, I’m the Spendy McSpendalot in our relationship. And I love having guilt-free blow money built into the budget!

      1. J. Money June 21, 2013 at 9:53 AM

        Haha, me too ;) I’m always spending more than I should in certain areas than the wife is – she helps keep me more in line though!

      2. Kathleen June 22, 2013 at 10:03 AM

        I guess we have different ideas about what a budget is. In my experience, just knowing where your money goes is different than trying not to spend more than x amount in various categories. You’re probably right that any amount of living within your means is some sort of a budget.

  12. krantcents June 20, 2013 at 11:21 AM

    Although I use a form of a budget similar to yours, I approach it differently. It helps that I have years of budgeting and was a former CFO. I start with my savings and live on what is left. I constantly review my expenses every time I pay the bills. It worked for me since I achieved financial freedom about 28 years ago at 38 years old.

    1. J. Money June 21, 2013 at 9:54 AM

      Nice man! Congrats! I actually need to check out your site more as it’s been a while. Interested in learning the steps you took to get there :) Perhaps a future guest post for my blog one day?

    2. Kathleen June 22, 2013 at 10:05 AM

      Sweet! CFO stamp of approval is good enough for me!

  13. Savvy Financial Latina June 20, 2013 at 11:50 AM

    I do a similar way. We don’t budget per say like I’m only going to spend $500 on groceries this month. But I do have a monthly savings goal. I also have my 401K contributions take out before my check gets deposited, so that’s technically extra savings. I pay my bills, and if there’s any extra money it stays in our checking account. I’m hoping that over time, I will build some extra padding in my checking account from the leftover money. Our general savings account includes down payment money, emergency fund, and hopefully extra money for ROTH IRA.

    1. Savvy Financial Latina June 20, 2013 at 11:54 AM

      I forgot to mention. I do have max limits on how much we should spend.

      1. Kathleen June 22, 2013 at 10:06 AM

        Also a loose budget, from what I’m learning here!

  14. Shafi June 20, 2013 at 12:02 PM

    Budgets are sexy and good. The problem is that most people make a budget and quit following it a few months later. The key with budget to be successful is to consistently stick with it. Update your expenses and income on a monthly basis and enter your expenses whenever you purchase something.

    1. J. Money June 21, 2013 at 9:55 AM

      Yeah, that’s what I like the most about this post actually – it doesn’t scare you off at all and keeps it low key and easy to follow.

    2. Kathleen June 22, 2013 at 10:14 AM

      You’re right. Some people end up cheating on their diets and budgets in the same way.

  15. Financial Black Sheep June 20, 2013 at 2:18 PM

    I think not having a budget is more convenient for people with more income. That way they have more give with their spending choices. I have a budget in order to live. I don’t have debt, i just cannot afford to live without a budget because I make such little money. Being a free spirit with money seems like a nice way to live, but isn’t that what gets many people in trouble in the first place?

    1. Kathleen June 22, 2013 at 10:16 AM

      Ha! You are funny. I don’t think I qualify as having more income.

  16. Jacob @ iHeartBudgets June 20, 2013 at 2:26 PM

    Kathleen is at it again! Now, I totally agree with everything you said, except that budgets aren’t sexy. Maybe the IDEA of a budget isn’t sexy, but once you’re rockin a sweet, sweet budget for a few years, you’ll start to understand the attraction ;)

    Kathleen, you’re rocking your finances harder than AC/DC on top of Mt. Everest, and I think the mindset change is KEY to making that happen. But I think there’s a HUGE benefit in not only tracking your spending, but then standing in front of it and assigning those dollars to a task before the month begins. That way they’re not all lost sheep, wondering where they should put their spending power, but they have a plan and a purpose. No one wants their money to have an identity crisis!

    That all being said, I do like your approach, and the changes you can help someone make taking them through your steps are going to be HUGELY beneficial for them. But you know where I stand on the budget thing ;)

    1. J. Money June 21, 2013 at 9:56 AM

      “you’re rocking your finances harder than AC/DC on top of Mt. Everest” – hahahhahahhaaa

    2. kathleen June 25, 2013 at 2:09 PM

      awww thanks Jake! I’ve learned through these comments that knowing where my money goes and living within my means is a budget of sorts. So maybe we’re not as different as I thought.

  17. Melanie June 20, 2013 at 4:10 PM

    “Credit card debt sucks, but that doesn’t mean you suck for carrying credit card debt. I promise. Don’t beat yourself up.”

    You may have just freed my soul.

    1. kathleen June 25, 2013 at 2:13 PM

      then my work here is done. :)

  18. Cat Alford (@BudgetBlonde) June 20, 2013 at 8:37 PM

    Ha! I love this post and I love Kathleen. Too funny. I like my budget but I have moved from a super intense excel sheet to the ease of the envelope system. :)

    1. kathleen June 25, 2013 at 2:14 PM

      I cannot do that! Money burns a hole in my wallet.

  19. Elle @ ForHerByHer June 20, 2013 at 11:14 PM

    The ‘loose budget’ is what I use as well. I tried having a strict budget where I kept track of every penny I spent, but it just wasn’t realistic or sustainable for me. If it’s not sustainable, eventually people lose interest and drop it altogether, so the key is to find something that works.

    For me, budgeting wasn’t enough. I wasn’t just trying to save money, I was trying to pay off a very ugly debt. The only way I was going to get that done in this decade was to make more money. For this reason, I’m a HUGE side hustle fan.

    1. J. Money June 21, 2013 at 10:11 AM

      I’m with you on that one. I tried tracking every single penny for just a day and almost vomited, haha… I like budgeting in clumps – much easier for me to stick with :)

    2. kathleen June 25, 2013 at 2:16 PM

      I’m with you! I can’t do it. I set up a grocery budget and then was at the grocery store buying a vacuum filter. Thinking, jeez, so according to the budget, I should not be spending my $11 on a filter. This is stupid!

  20. Christine @ ThePursuitofGreen June 20, 2013 at 11:59 PM

    I started out without budgets, just living below my means and putting extra money to savings. Now, a few years later I’ve started using budgets, especially for a 2 person household! It’s very helpful to know how much we spend on things. Seems once you get the willpower, then the budgets come in handy mostly for tracking spending. Works for me! A combo of both!

    1. kathleen June 25, 2013 at 2:17 PM

      I can see that! Right now, I answer to nobody, so it is simple. Perhaps one day I’ll combine finances with someone and then we can decide together how much to spend in restaurants.

  21. Mike@WeOnlyDoThisOnce June 21, 2013 at 11:17 AM

    Being in a secure place, financially, I think is a great way to focus on what’s really important, as you have pointed out so eloquently.

  22. Rob Michaelson June 21, 2013 at 7:40 PM

    Awesome stuff. It great to read things about budgeting that are actually funny/amusing. As a comedy writer in LA, I’m always looking for ways to keep a budget especially when how much income I get in every month changes drastically.

    1. kathleen June 25, 2013 at 2:19 PM

      Oh, goodness. I’d need a big giant pile of money in my savings account if my income fluctuated drastically.

    2. J. Money June 26, 2013 at 12:46 PM

      A comedy writer? Awesome! If you ever feel like divulging the ins/outs of what it entails, and how much you make (and *can* make) I’d love to feature it on the site :) Would make for a pretty interesting guest post!

    1. J. Money July 1, 2013 at 5:53 PM

      Thanks Christine! Glad you enjoyed it :)