My Friend Tried Budgeting for the First Time in 2024. Here's How It's Going So Far

My friend Jane (not her real name, but understandably, she asked for anonymity in the context of this piece) realized late last year that her personal finances could use an overhaul. Jane turned 40 in 2023, and, as she put it, “It’s embarrassing that I’m this old and have pretty much no savings, retirement or otherwise.”

In reality, I don’t think Jane needs to be embarrassed per se. She went through an ugly divorce in her 20s that left her in a bad financial spot. She married again in her 30s, but then had kids. That resulted in a short career break and derailed her savings efforts.

I reassured her that it’s not too late to get her finances on track. But I did advise her to start making big changes in 2024.

One thing she agreed to do to kick off the year was follow a budget that I helped her put together. But two months later, she’s given up. And I can’t really blame her.

Budgeting doesn’t work for everyone

Budgeting is a useful thing in theory. You list your expenses, figure out how much they cost, and make adjustments as needed to ensure you’re saving money at the end of the month.

The problem with budgeting is multifold. First, even if you use a budgeting app, the process isn’t seamless. You have to check in and make sure different purchases are being allocated to the right categories, even if that’s supposed to be happening automatically.

Also, budgeting can be restrictive. Say you allocate $600 a month to grocery costs, only to find that you’ve already spent $580 one month with five more days left. At that point, you either have to find money from another expense category or force your family to live off of ramen and canned vegetables for almost a week.

Jane didn’t want to use an app to budget. We tried the good old spreadsheet method instead. But all told, she got frustrated quickly and said she was done. So we knew we needed a better system.

A more optimal way to save

Jane’s goal in budgeting was to control her spending and save more. So we’ve realized we can get her to that goal without having to stick to a strict budget.

One thing Jane has going for her this year is that she’s working full-time again. She gets an employer match for her 401(k) contributions, so she signed up to contribute enough from her paychecks to get that match in full. That’ll help her jumpstart her retirement savings.

Jane also has the goal of building emergency savings, as she has dangerously little at present. For the record, 63% of Americans don’t have enough savings to cover a surprise $500 expense, according to SecureSave, so Jane’s not alone there. But she’s trying to do much better.

What we did at the start of March was set up an automatic transfer from Jane’s checking account to her savings. Now, that money will leave her account at the start of every month off the bat.

As such, Jane doesn’t necessarily have to focus on whether she spent $10 extra at the supermarket or $5 less at the gas pump. She knows she’s saving the amount she’s targeting every month off the bat.

Jane also agreed to cut out a couple of bills that were getting in the way of her savings. She and her husband canceled two out of their three streaming services, and they also canceled their youngest child’s gymnastics lessons since they’re a pain to get to and it’s something they can always resume when money gets less tight.

All told, the combination of automating savings and cutting bills is likely to work better for Jane than following a strict budget. And if you’re trying to improve your finances, you may find that the same holds true for you, too.

So if you’re new to budgeting and it proves to be more complicated or annoying than you bargained for, know that there are other options. And for the record, I’m a former budgeter who gave up on it a while back because it started to bug me, too. I now automate my savings and try my best to keep large expenses (like housing and our cars) low, and that system has worked pretty well.

I’m not saying I’ll never go back to budgeting. But for now, it’s not something I have to do, which means you don’t have to, either.

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