How To Manage Expenses Without A Budget

It may sound surprising, but I don’t have a monthly or yearly budget that I set for myself to adhere to.

I think that budgeting is a great way to take ownership of one’s expenses and can be helpful for some people.

However, I don’t think it’s necessary for everyone – it’s possible to manage our expenses even without a budget.

Why Budget?

First, let’s talk about why we might want to set a budget at all.

Setting a budget is particularly helpful when we are trying to keep our expenditures within a certain limit.

This might be because money is tight and we want to make sure that we spend within our means.

It could also be because we are trying to save money towards a particular goal like putting a down payment on a house.

Or maybe we are just trying to incorporate a responsible spending habit into our lives.

Why I Don’t Set A Budget

There are several reasons why I choose not to set a fixed budget for my expenses every month, but I still manage to keep my spending under control.

Here are the things that help me do so.

1: I’m Frugal

The first reason is that I’m quite a frugal person, which shouldn’t come as a surprise.

I’ve always been more of a saver than a spender, and in recent years, I’ve been more intentional with my spending.

Most of what I spend on are things that I need like food and transport or on my loved ones like my family.

I don’t buy things on impulse and I seldom spend on things that I want.

And if I do buy something that I want, you can be sure that I’ll find ways to stack discounts and promotions to get the best deal for it.

Being frugal puts me in control of my spending, so I don’t need a budget to control it.

2: I Track My Expenses

Besides being frugal, I also track my expenses diligently.

Budgeting often comes hand-in-hand with tracking expenses because that’s how we’ll know whether we’re keeping to our budget or not, but they’re not the same thing.

And in my opinion, tracking expenses is the real benefit of setting a budget.

By tracking my expenses, I have a very clear view of the things I spend money on and how much I spend on them.

This, coupled with being frugal, has allowed me to cut down my spending on unnecessary things that don’t bring me joy.

Also, tracking my expenses makes me aware of how much exactly I spend every month, so I know what my average monthly spending is like.

If I notice that my spending is higher than average, I will review my expenses to see if there is anything out of the ordinary, which there usually is.

Tracking my expenses gives me a complete view of how much and what I spend money on, so I can monitor my spending closely.

Even without a budget, I know how much I expect to spend.

3: I Have Savings

Finally, I don’t set a budget to curb my spending because I have savings that I know I can fall back on.

Just to be clear, this is not to justify overspending on things that I don’t need.

As I explained earlier, I’m frugal by nature and spend my money intentionally most of the time, and I track my expenses so I always know how much I spend.

But sometimes I spend more than normal on certain months for whatever reason, and I don’t let myself stress over it.

That’s because if I’m spending more than usual, there’s usually a good reason for it.

Birthday/festive celebrations within my family, stocking up on consumables during sale periods, etc.

More importantly, I don’t stress over it because I know I have financial security in savings that I can use, so I don’t have to worry that I can’t afford what I’m spending on.

Do You Need A Budget?

As I mentioned at the start of the article, budgets are going to be more helpful for some people than others.

Whether you need a budget or not ultimately depends on your financial habits.

If you relate to the points that I shared above, ie you’re frugal, you track your expenses, and you have financial security, a budget might not be necessary.

You’re most likely financially responsible and are aware of your finances (at least in terms of expenses), so you don’t need a budget to be mindful of your spending.

However, if you are more of a spender than a saver and tend to splurge on yourself and your loved ones, a budget will more than likely benefit you.

Firstly, trying to stick to a budget means you will naturally start tracking your expenses, which gives you a clear picture of where your money goes.

If your spending ends up being less than you expected and you’re okay with that, that’s great – you can continue doing what you do without feeling bad about your spending habits.

But if your spending exceeds how much you expected it to be and you think it’s too much, it’s a clear sign that you need to find ways to cut down on your spending.

Regardless of the outcome, tracking your expenses makes you more aware of your expenses.

Next, when you are looking for ways to reduce your spending to keep within your budget, you’ll be forced to look for cheaper alternatives to the things you regularly spend on.

This might mean choosing to drink a kopi from the coffeeshop instead of a latte from a cafe or choosing to eat at the food court instead of a restaurant.

Throughout the process, you’ll end up realising that you don’t mind compromising on some things so that you can allocate more money towards other things.

Ideally, the result is that you’re able to cut down on your expenses to keep to your budget by reducing your spending on things you don’t care much about while still being able to spend on things that you do care about.

To summarise,

Setting a budget can help to keep your spending under wraps, but it might not be necessary depending on your financial habits.

I think that being frugal and tracking expenses is good enough to stay on top of your expenses as long as money isn’t tight.

There’s no need to stress out unnecessarily about sticking to a budget as long as you’re making financially responsible decisions.

Do you keep a budget? Why or why not? Let me know in the comments below!

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