Why a budget is a waste of time. And what to do about it!

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1 Response

  1. No plan survives the first battle. Like with the company budget it is negotiations and agreement on the tactical moves.
    Most of the people do not create budgets at home, but simply writing down the expenses. The budget is the income. We have been doing for the past 10 years, you might argue that it is
    inaccurate. Although I do not believe so, lets add 5% or even 10% to it. It is still very interesting and representative figures.

    http://www.niterainbow.com/search/label/Family%20Budget

    For example, tt helps to understand how much money do we need once the mortgage is paid and kids leave the house. When we moved from Chicago to Oxford in the UK, we had very good comparison (and surprise
    how heavily taxed western europe is). Beauty of it that if you keep doing it, it becomes more and more reliabile, even when even if you decided to skip few purchases.

    I agree with you that making auto saving is good idea, but this does not substitute for a budget. Its easy to make the savings, for example, you start skipping dental appointments or essential house maintenance. It is short term win, long term loose.

    What I can not understand and paying off mortgage. If interest rate is about 4% and market does 7% (long term), what is the point of investing in the mortgage right now?

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