That's a catchy thing to say but if someone is making $350K a year and easily saving / investing six figures annually without a budget, telling themn they need a budget sounds a bit absurd. I'd say the further you are from being able to invest / save sufficiently for your long term goals, the more a budget will help you. Admittedly, not nearly as catchy.
For the people who need a budget, they would just run out of money completely before their next paycheck and either get kicked out of their apartment, or dip into their savings.
I'm in that situation. I'm fairly thrifty and don't spend much. But after looking back over my spending, I've realized there was enough useless crap that I could cut out. For example, I realized I was spending an enormous (to me) amount on lunches at work, though it was nothing fancy. It's just that I was working in a rather touristy / "rich" part of town, so aside from a pastry, everything was above €10. I started packing my own lunch most of the time and the cost went waay down for no discernible loss.
Bonus points for eating less and losing some weight, but that's a different story.
Or can save some hardness as you reach 55plus, when getting employed becomes harder but state welfare is still 10 years down the line.
An habit to budgeting helps because people aren't always top dogs.
If that is the golden rule, then the platinum or diamond rule is to earn at least $x. There exists a lower limit under which certain parts of life are simply not affordable, such as saving for retirement, healthcare, education, children’s education, etc.
>I don't care if you make $35K a year or $350K a year, you need a budget.
At $35k, I imagine everything coming in is going out. You really just need to focus everything on increasing income. For people in the USA at least.
If you make $35k, it is still possible. It might not be comfortable, and that seems to be the great success of capitalism in the 21st century: convincing people that they shouldn't ever be uncomfortable, or that they can't be without certain items or experiences that they most certainly can be.
Increasing income is great. Literally (almost) everybody wants this. There is high demand for increasing income. The supply is part of the issue, and the cost of increasing income is the next barrier. Bettering your situation takes effort, either to decrease your spending, or to increase your income. Doing both at the same time takes double the effort.
The last thing somebody making $35k (or $25k) is some provincial yuppie zoomer saying to them "Just make more money lul". It doesn't help anything.
My advice is for those at 25 years old working in a fast food place who can read and write English. Their time excessively pruning their budget is better spent learning new skills and attempting to sell their services in a market that pays more.
>If you make $35k, it is still possible. It might not be comfortable, and that seems to be the great success of capitalism in the 21st century: convincing people that they shouldn't ever be uncomfortable, or that they can't be without certain items or experiences that they most certainly can be.
I do not know what this means. It is possible to live in the forest and forage and be comfortable, everyone was a few tens of thousands of years ago. But surely things like a safe neighborhood, healthcare for you and family, and opportunity for education are basic things that people can be expected to strive for, and that are not really achievable under a certain income in pretty much all populated regions of the US at $35k per year.
At most you cannot make more than the GDP of the Earth, while your spending habit can be arbitrarily high.
Doing anything excessively isn't good. Nobody is saying budget "excessively". If budgeting is taking up all your time, may be you're budgeting excessively.
If you needed time off to study for a career change, you cannot do it without first having a budget, saved up and such.
So regardless of the desire to increase income, the first step is to have solid data about your expenditures; aka, a budget.
It may be that those with lower incomes spends more on a smartphone because it is their only way to access the internet.
I bought a Chromebook for $200 probably 5 years ago that my wife still uses for all of the things that she doesn't want to use the phone for. There are still decent computers that are available for far lower prices than top-of-the-line phones.
It all goes back to personal finance vs. capitalism. Big Business wants you to believe that only the best smartphone will do, no matter your budget (what budget, haha?).
If you don't make that much money and you want to escape eternal debt-hell, you have to overcome this mindset and find good budget options. And I maintain that it can be done. Move out of the city. Establish trusting relationships through your own hard work and good faith efforts. Swallow your pride and lean respectfully and gratefully on friends and/or family if you have to. And then be there when someone needs you for the same. Big Business also wants you to believe that it's every man for himself, but that doesn't have to be true either.
You do realize that like half the world lives in under a dollar a day right? It is expensive to live in the west, and technically you are right, but people even manage to have an apartment, etc, etc, etc, in NY city and live on $100 a month.
People spend money mostly to signal to others their wealth, and secondly to save the brain power it would take to find free alternatives. 35k is just so far below your income it is the furthest you can image or have acquaintances at that level. But if you make that, you would have some other arbitrary number where it was not affordable to live under.
I don’t think it’s entirely YNAB’s fault. But having to manually input each credit card transaction doesn’t make me feel it’s worth the monthly charge. Then it just becomes a spreadsheet.
EDIT: that is— the lessons are excellent and the mindset is important. But it’s monthly cost is another issue.
I use my AMEX for 90% of all spending. No issues importing transactions to YNAB. Sometimes there is a 1-2 delay, but they do import.
Maybe I was spoiled with near instant syncing on my debit card, I used to categorize the gas i just paid for before leaving the lot.
But again, at 15 a month, that’s a lot of effort for a gui on top of a spreadsheet.
The benefit for me was quick transaction logging and categorizing, then a weekly/monthly check up. But with sync issues, those check ups became categorizing sessions, and just took too much time.
A budget is designed so that when the rent becomes due on the 29th, or you are hungry and you want want to consume food on the day before your paycheck comes in, you don't discover you have $2.50 to your name.
You could put money aside for food every day, and for rent, and utility, as well, and that would be called a budget. IN fact just paying yourself first, is just a really simplistic underdeveloped budget.
You seem to be trying to imply that I must believe that any form or preparation is a sign that you can't execute. Which is dumb.
I've said nothing of the sort. That's pretty rude to people who actually suffer from OCD.
I don't personally believe checking my net cash flow every few months counts as budgeting but if you do, sure, that's a semantic disagreement.
Then again I've often thought that I simply don't need a budget for X if my spending on X (as analyzed over a year, or five) is so much below of what I would put as a budget if you'd asked me to guess one.
Example: If I like buying music, I'd maybe give myself a budget of 30€ for music per month, that's 2 albums. Looking at how many albums I actually buy in a typical year, or in an excessive year - I've never even come close to buying 24 albums in a year. So that thought process might have happened once, 10 years ago and until I start to earn a lot less or albums get a lot more expensive, I'll just buy as many albums as I want, and usually end up with 5-10 per year.
For example, I'm about to take a trip to Europe, which would never have been possible if I had "budgeted".
Curious why ? Sounds like the same thing
Ignore them, and you can do whatever you like! You do have a point though, I could probably bring the cost down and still manage it... this is what budgets are for.
Then I got into FAANG and switched to buying whatever I want and fully pay off credit cards every month
UNTIL my wants got bigger and bigger - last minute vacations, concerts, a lot of “experience” stuff coming out of covid lockdowns
And now, RSUs are down , I spend more than I bring in each month, started drawing down on cash savings - YOLO - still driving a Camry though
I need a budget again
I use YNAB because it works for me, but I've used paper and spreadsheets in the past. The key is having the budget so you can understand where your money is going. You aren't always going to stick to the budget, but by paying attention and classifying all expenses, you can better understand things going forward and then plan better.
I don't care if you make $35K a year or $350K a year, you need a budget.