Budgets...who needs them?

I was sitting having a coffee the other day celebrating the end of summer school for another year when I overheard two people in the booth next to me talking about budgets. As I have a keen interest in personal finance, my ears perked up and I listened in.

One person was complaining that her husband was making her have a budget to track her spending for the month. She complained and said that "she felt like she was a kid having to do this". The other person, who was trying to sell her something, was sympathetic, but I thought to myself, "Everyone hates to budget for themselves, so what can be done".

Here is my philosophy on budgets: if you are able to save 10-15% for your retirement and on top of that spend less than you make every month and have no credit card at the end of the month, you don't need a budget. So the question is then, how do we accomplish this?

For most people, some planning is required, and that's why the budget is a good thing. But just by trimming your expenditures each month, or making some extra money on the side, you can do this. For myself, I need to track things electronically, so that is how I track my spending. As well, I now formally have a budget by only spending cash for items. As soon as I run out of cash, I can no longer spend.

The system works for me, but the point is that you have to determine what system will be successful for you. No one likes to be told what to do with your money, because it feels like some of your power is going away. If you can find a way to spend less than you make in a month without a budget, then great! Keep it up! But the reality is that for most of us, we need something to limit our spending.