Automated Budget?

Photo credit: urbanraven

Another great graphic! Thanks, Mark …

Unlike those whose MM101 issues are at the fore, Mark has a good income and low cost base so the ‘pressure’ to budget, etc. seems less … but, how important do you really think it is? Any advice for Mark on his spending / saving habits?

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I must admit I’m not a big fan of budgeting. I did attempt to follow the No Budget Budget, but I failed miserably, hence the broken pie chart above. I’m too used to letting Quicken download my financial data and perform monthly analysis on my spending. I usually have a 12-month average that I use as a benchmark. This is how I compare against my average spending. My average spending is actually here.

How do I compare with the average in April? It was a huge difference! I just moved in to a new home and I’ve spent about $5,800 fixing up the old townhouse for rental. That amount paid for a new heating and cooling system, painting, cleaning and fixes. I haven’t started paying the mortgage for the new home yet and I’m still paying for the old townhouse.  By comparing with the average, I can quickly identify anomalies:

A quick glance shows that I’m $5,472.01 out of my norm. This is mostly from Rental Expenses that incur in April. Another anomaly is Entertainment; I just bought 8 tickets to a U2 concert and I’m going to sell some of them. I might actually make a small profit later – I’ve done this before .  How do we record such activities in a budget?  I’ve also increased my charitable contributions and bought some ceiling fans and tools for my new house. The moving sale and a drop in gifts did offset some extra moving expenses.

I keep questioning about having the need to budget. I know I do spend less than what I’ve earned and my savings are automatic. Should I spend more time budgeting or spend more time earning more income?

I actually believe that savings from budgeting may not have a huge impact that I’m looking for.  Savings on big ticket items like a house, car or education should have a larger impact. Nevertheless, having good MM101 habits is very important.  We will see how I will do in May when we apply the 10-1-1-1-1 rule. Will it stop me from spending?