Some people don’t like the word budget, equating it to shackles on their desire to spend and enjoy life.
In my experience as a financial planner, I have observed that perspective may stem from being unable to fulfill an unrealistic budget objective.
There are 2 better paths to success:
1. Instead of restricting yourself to an arbitrary amount of monthly spending, it is more important to find out how and where you spend every month. Almost everyone would soon discover they spend more than they believed. Plastic money and advertising are the enemies of wise spending. Once you know how and where you spend it is easier to be wiser, especially if you have a financial goal you want to achieve.
2. Separate fixed expenses from discretionary expenses. Some expenses are the same amount every month such as mortgage or rent, insurances, cell phone or internet bills. Others you have more control over. If your discretionary expenses are bigger than your fixed expenses that could be cause for concern.
A simple budget with fewer categories will increase the chances of success. Creating an emergency fund should be part of any budget. If you cannot save for an emergency fund every month then save your tax refund or bonus for those large unexpected expenses.
Bottom line: How much do you want your future financial goal versus the pleasures of today?