FI Fighter

Budgeting: Why I Don’t Need to Do It


In High School, I was a C student. I didn’t work hard, I didn’t study, and quite frankly, I really just didn’t care. It wasn’t until I entered college that I made a conscious decision to “shape up” and get good grades. This was not easy! The process of converting myself from a C student to an A student required a lot of time and effort. In a sense, it was like trying to re-wire the brain.

Learning to Budget

Bad habits die hard. My first attempts at getting good grades were unsuccessful. Since I didn’t know what it took to be an A student, I had to learn through trial and error. During the first semester of college, I decided that I should try and use my time more wisely. To help enforce this idea, I budgeted out sections of my day to take on specific tasks. For example, 3:00 PM to 5:00 PM was when I would study for Pre-Calculus. After dinner, from 7:00 PM to 9:00 PM I would finish my reading assignments. This is how things went along, for awhile. The budgeting of my time helped me get acclimated to a new type of routine. Once the report cards came in, I used the results to fine-tune the feedback mechanism. If I got a B on a midterm, I would re-work my schedule to allocate more study time to that particular subject. Maybe instead of studying just once a day, I would break up the assignments into two separate partitions.

On and on this went. The first few corrections were major, since I had no precedent to fall back on. After a year, I was in the swing of things. I was now getting A’s in most of my classes, and had become pretty good with my study habits. By the third and fourth year, I simply stopped trying to follow a block schedule. This stuff was becoming second nature, and I no longer needed any guidance.

Long story short, the hard work paid off. I not only graduated college from a top university, I even went on to complete my graduate degree in an entirely different field of study. All of this was made possible thanks in large part to “learning how to budget” my time in Year 1. However, after Year 1, I never worked on this skill again. By Year 2 and onward, I already knew what to do. Budgeting was no longer necessary…

When It Comes to Finances…

Most personal finance gurus/bloggers will preach to you on why you need to budget your expenses. They will go on and on about the benefits of keeping track of every last expense. Budgeting will hold you accountable, they reason. Otherwise, you might fall off the horse and end up back in debt!

If you look around you (and across the internet), everyone is telling you to budget… so how can it possibly be unnecessary… or a waste of time? Perhaps, these experts are catering to the masses? Budgeting is most necessary and applicable for the following two types of people:

  • Those carrying lots of debt who are trying to get out of it.
  • Those who are finally debt free and want to start saving money.

Quite frankly, most people you run into will fall into of these two groups… But what if you don’t belong in either category?

After a Certain Point

If you’ve been saving your income, investing it, and re-investing it, I’m guessing you’ve gotten pretty comfortable (and good) with this routine. In fact, I would argue that it has become second nature to you. Sort of like brushing your teeth twice a day. Those who have been on the journey to early financial independence for some time do not lack discipline or motivation. You can’t get very far to financial freedom if you aren’t fully committed.

After a certain point, like with studying for school, budgeting just becomes unnecessary. This is Year 2 of the journey to early financial independence for me, and I believe I have reached this point. I’m right around the half-way point now, making my way up the mountain. This year, I’ve even stopped tracking my monthly expenses, since the results were starting to look the same each and every month! Whether I try or not, I’m saving 70% to 80% of my earned income each and every month. Not doing so would probably feel like going to sleep at night and not brushing my teeth. At this point in time, it would be a complete system shock, and totally unfathomable.

Point blank, falling off that horse is just not going to happen.

So, rather than having to exhaust myself, filling in each row of a spreadsheet with each transaction from each one of my ten credit cards… I simply stopped counting. What’s the point? I’m not new at this game… I know what I’m doing now.

How I Spend my Time

It’s not that I believe budgeting is a bad thing, it’s just no longer necessary for me. But keep in mind, I’m speaking from a perspective that’s far removed from someone just getting out of consumer debt. I’m an investor… and I do believe my time would be much better served focusing on more important things:

  • Where’s the next good deal?
  • How do I get through underwriting the next time around?
  • How can I generate more passive income?
  • How can I claim more deductions come tax season?
  • Managing properties and property managers.
  • This blog! 🙂

Bottom Line

The reality is, going slightly over or under a budget each month will not make or break my financial goals. I’m focused on generating more offensive firepower, because that’s the most important thing to do right now. It’s all about the cash flow, and I’m working hard trying to get it over the $2000/month mark.

I’m well past the days of cutting out lattes… I could drink one everyday and it would make ZERO difference. When you’re talking about closing deals on real estate properties that cost hundreds of thousands of dollars (and require tens of thousands in downpayment funds), an extra $100 or $200 saved is just a drop in the bucket.

At this stage as an investor, when the snowball is starting to roll, you’re better served focusing on the big picture items. This past year, I closed on three properties. Each time, after closing was complete, I went out and celebrated! I indulged a little and ate out at nice restaurants. In 2014, my goal is to purchase an additional three rental properties. If I can accomplish this, it will be a most successful year of investing. Everything else will just get lost in the details…

Ultimately, if you are getting straight A’s each year (hitting your financial goals), then you’re obviously doing something right! Budget or no budget…


Do you still budget? Even if you like to budget, or do so only to have a reference, do you feel like you NEED to do it? Without a budget, would you fall off the horse? Would your spending habits drastically change?

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This Post Has 29 Comments

  1. Nice school analogy FI. We still keep a loose budget, because it works better for my wife and I……as we have different styles. At some point though it’s just so ingrained in your daily life it doesn’t matter. Here’s to living the life!

    1. Bryan,

      Thanks! Yeah, if you’ve been doing it for awhile, it starts to become second nature… just gotta do what works best for you.


  2. In some ways I agree with you, like maintaining focus on the big picture is more profitable for some, instead of getting bogged down with the details. But there are other things I think are subject to the situation, like having a spouse. Having a budget keeps financial frustration and miscommunication at bay, and it’s well worth the effort for me even if it doesn’t actually “save” us money.

    Good post, though. Just like climbing the ladder in a corporate setting, sometimes the details NEED to be delegated if you’re going to be more valuable to your company.

    1. FI,

      Good point there — I’m doing this alone, so it’s much easier since I don’t have to answer to anyone. I can also know for certain that I won’t slip from month to month.

      I can definitely see how keeping track of expenses is beneficial, especially if they vary from month to month.

      That’s exactly my mindset — focus on the big picture items. Since budgeting doesn’t help me, I stopped tracking it and simply focus on what needs to be done to keep the passive income rolling.

      Take care!

    2. FI pilgrim that was a very tactful way of saying “Mrs Pilgrim needs to be kept in check”. 😉

      All joking aside though having a significant other really does make it worth keeping up with a budget and is probably the only reason why I still do one. It’s not so much a matter of trust but if you are not quite on the same page with your financial goals then you must come to an agreement on what spending levels you are both ok with and keeping the budget keeps you both accountable, so it should never be an issue.

      From a personal perspective I totally agree with everything you said in the article though FI Fighter, as usual 🙂

  3. I’m with you — I do not use a budget and I’ve never needed one in the past. I have great respect for people who do use/need one, but it isn’t for me.

    To me a budget always reminded me of a “diet”; it’s something you adhere to for a short period of time and you inevitably stop at some point because it isn’t a real lifestyle change.

    Once a savings-oriented lifestyle becomes second nature to you, the need for a budget is dramatically lessened in my opinion.

    1. Brad,

      We are cut from the same cloth, you and I. I’ve never really followed a budget… maybe when I first started working full time, but that was short-lived. I tried again when I started blogging on this site, but couldn’t find myself keeping up with it for long since the results were always kind of the same.

      Yes, I definitely don’t see the need for one if it’s second nature and you know you won’t deviate from it too much. For myself, a few hundred dollars give and take makes no difference in my gameplan. If it were thousands being shuffled around, then I would definitely need a budget!

      All the best!

  4. I’ve moved away from it. It’s a PITA. I’ve realized: 1) I am meeting my goals, 2) I have more money to spend than I plan on and 3) I rarely want to spend the money anyway.

    Sure, I may be able to shave a couple hundred bucks off my budget each month, but it isn’t worth my time.

    1. Elroy,

      Kudos to you for taking care of your finances! I started feeling the same way… it’s a huge pain keeping track of monthly expenses, and not really worth the effort if you already know the results won’t alter anything.

      Seems like we are at the same place, it’s not worth my time either. I’d rather be looking for investment deals, instead 🙂

      Best wishes!

  5. This is funny because I’ve had a post titled “What’s the point of budgeting?” in the back of my mind for a while. My conclusion is that the budgeting I do is still valuable even though I mostly don’t pay attention to it.

    I don’t feel like I need a budget. I do, however, like having a schedule of fixed expenses and knowing approximately how much I will probably spend in variable expenses. It makes it easy to know how much I can save each month without scrimping. I don’t think my habits would change without it, but it definitely makes me sleep better at night knowing that I have enough to pay the property taxes, even though I have far more than enough… I think I just have the type of personality that will continue to do this forever.

    Funny story: I actually _started_ budgeting when I got my first full-time job after college. No budget all through college (did track my spending though, since I was 16) and started when I got a six figure job. Go figure.

    1. Leigh,

      How, funny… It would be great if you published that article, I’d like to hear what you have to say.

      Yeah, I figured you wouldn’t need a budget since you save like 80% of your income every month… I can see why you’d want to track it, and progress in general. The way I look at it is if my financial goals are being met (net worth, cash flow, asset acquisition), then the proof will show up there. Tracking expenses is kind of redundant if the other items are working out.

      Funny, I did the same thing. Maybe, it’s that feeling you get when you first land a new job? You want to start “being an adult”? I don’t know, I guess that was my reason for starting one.

      Take care!

  6. I like your take on the budget issue, though in full disclosure I still do it. I mostly use the tool because, while we save a good percentage, I rarely ever hit our savings goal for the month. (As we have zero ‘wiggle’ in the budget…every dollar is assigned somewhere so even a slight deviation on spending kills any chance of hitting the savings goal.) In my case, I think Zig Ziglar is right: if I aim at nothing, I’ll hit it every time. The budget gives me something to aim for…even if I just keep barely missing…

    1. Done by Forty,

      I see, if setting the savings goals gives you that target to aim for, then it makes sense to complete the exercise of budgeting. For myself, saving an extra $100 or $200 is probably the best I can do each month, and that won’t move the savings ratio needle more than a percentage point or two. I found that I was basically stuck at 70% to 80% or so and saving a bit more each month made no difference.

      In my situation, I’m trying to ramp up savings to buy more properties… In order to speed up acquisition time, I would need to save an extra $5000 or $10,000 each month for it to make any difference… otherwise, the fund accumulation towards the next downpayment would still land on the original target month anyway… For me, budgeting just isn’t worth it since it doesn’t buy me anything.

      Glad it works for you!

  7. Hey FI,

    Budget are a good tool to start out with and if the margins are very slim. They are a good motivation tool for those who like to see increases and save in absolute figures…

    I just about finished a post on the same topic :

    Your comments are more than welcome 🙂

    1. Resman,

      That’s right… If you earn $1000/month, saving $100 is 10%. That’s a pretty big portion.

      If you earn $10,000/month, saving $100 is 1%… That won’t make a difference…

      If your expenses are basically fixed each month and only incur minor fluctuations (few hundred dollars), it’s just not worth tracking if your income is so much higher.

      I’ll check out the post!

  8. Nice to see someone saying this! Sometimes I feel like I’m doing something wrong by not keeping track of every last expense. I do need to start doing that in the near future to accomplish some goals that I have, but I like the fact that you are reinforcing what I believe that you don’t always have to be living according to a budget. If you are already in the habit of living a certain way, that’s just the way it is!

    1. Janine,

      Yup, I definitely feel like there’s a time and place for a budget, but it isn’t something that’s necessary for everyone. If you are in a habit of living a certain way, and would operate the same, regardless, then you should just carry on as you were.

      Quite simply, budgeting doesn’t help me in any way, so I choose not to allocate any time to it.

      All the best!

  9. The further along I get the less I feel compelled to budget. Now I do it more just out of curiosity and to compile data. The second half of this year I’ve done a horrible job keeping track of my expenses as they come in and they’ve increased probably 2-4% so I’m not in bad shape. However for those that are in the early stages of their journey, especially those that are in debt, I think a budget or spending plan or whatever you want to call it is a necessity. If it wasn’t you wouldn’t have gotten into debt in the first place.

    1. JC,

      Yes, the curiosity and data compilation are also reasons why I first started tracking everything… It was kind of useful at first since it gave me some baseline numbers to work with. After a few months, I noticed that my results weren’t changing. I had found a workable steady-state…

      I know this doesn’t apply to everyone but that’s just how I operate. When I find a happy balance, I’m just not prone to deviate or get away from it too much… And even on the months that I did indulge and spend in excess, it still wasn’t registering more than a few hundred dollars. When I realized this, I knew that keeping tabs was no longer necessary… Similar to your own situation, 2% to 4% variation just isn’t going to alter anything…

      Agreed, this is most needed for those folks just starting to get out of debt.

      Take care!

  10. Impressive you got to where you are as a C student!

    I have a set range for credit card spending a month. Everything else is not tracked because I spend whatever is allocated to me after making a budget.

    1. Sam,


      I don’t like spending my own money, but I love charging my credit cards! But that’s to pay for rental expenses… and the rental income takes care of that.


  11. FIF,
    I started using Mint almost 2 years ago and I am over it. Especially the investments part of it. I still use the budgeting tool, but mostly to keep track of our family spending which is difficult with my wife going to Target and buying groceries and diapers, which are on different budget lines. If I don’t keep track, she’ll spend too much on groceries without meaning to. But I don’t care too much if things aren’t precise. Tougher with a family. I never budgeted before I was married.
    Just saw the guest post on RB40. Nice!

    1. RBD,


      I’m still using Mint to track my net worth, but I’ve never used it for budgeting…

      Yeah, I would imagine it’s a bit tougher with a family. I guess my article mostly applies to those who are single, or have a partner that is 100% aligned with their own spending tendencies (good luck finding someone like that!)


      1. Ha ha ain’t that the truth!

        I Shouldn’t say that actually, Mrs Firestarter has been very agreeable to my lifestyle optimisation suggestions so far. She’s a cracker! (You have to cover your back right)

  12. I agree to an extent. I don’t have a hard and fast budget, but I track where all my money is going and make sure I’m not wasting too much money on things I don’t place a lot of importance on.

    1. Jay,

      Tracking expenses can be helpful, especially if it influences your decisions/planning. This isn’t the case for me, which is why I gave up on it entirely… but everyone is different.

      Glad you found something that works for you!


  13. I hate budgeting and never do it. I do a monthly review to make sure my NW is growing and that is it. If it is not and there is no good reason, I slow down on spending but I don’t remember the last time that happened.

    1. Pauline,

      Same here! We are much alike. If the net worth is rising, the cash flow is rising, and I’m buying more and more assets, I know I’m doing something right!

      I like to keep things simple — focus on the big picture. If my goal is to buy 3 properties in a year and I succeed in meeting that goal… everything else is just filling in the details…

      Glad the net worth keeps rising for you!

      Take care!

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