Flexible Budgets are Successful Budgets

by Kevin on September 11, 2009

How many of you reading this article live life without a budget? Or as Dave Ramsey likes to call it: a cash flow plan.

Why aren’t you living on a budget? Is it fear? Are you scared of the numbers? Does the math seem too complicated?

While those are all likely common issues you may have with budgeting I’m going to talk about a different one today.


Budgets are Rigid

Budgets are inflexible documents that force you to live a lifestyle you don’t want to live. Those simple written (or typed) numbers trap us in a box. That box requires us to live perfectly in line with the budget. No mistakes are allowed and stress is the result.

When I get questions about budgets I often think the reader is imagining Moses holding up two stone tablets: “Debt” and “Save”.


Budgets should not be rigid. Period.

A rigid document like the budgets some think of does not help you reach your goals. I can’t tell you how to live your life. Anyone who does is leading you toward failure. Your budget categories will be vastly different from mine because we live different lives.

Budgets Must Be Flexible

You have to have a little bit of “give” in your budget. One month you will spend less in your eating out category, but something will pop up in car maintenance. If you’ve got a flexible budget you just move money from one category to the next.

Again it is impossible to live on a budget down to the last penny every single month. Things will happen. You will make mistakes.

Thankfully with a flexible budget… you don’t have to be perfect!

Steps to Getting on a Budget

That having been said having a flexible budget can be complicated. If you are currently not living on a budget it would be crazy to think you could move to a very complicated budget over night.

Instead do the following steps:
…if you are not on a budget, get on a basic one. Figure out the basics like how much debt you have, how much money you earn each month, and get a rough number for how much money you spend on expenses.

…if you are on a basic budget, add some additional layers of detail. Set some budget constraints for specific categories like groceries and eating out. Figure out how much money you can apply toward your debt.

…if you are have added a few layers of detail, add more or set up specific goals for saving. I’ve said it before, but goals are critical to your success. There is no reason for the journey if you don’t have a destination.

Add a “Didn’t Think of That” Category

This is an additional layer of flexibility.

There will always be something you didn’t think of. You’ll forget about school photos, you’ll be unprepared for the flat tire, or you will have a medical emergency. My Dad always says “It’s always something” in regards to unplanned expenses.

Instead of letting these expenses surprise you… plan ahead for them.

But how can you plan for something you don’t know is coming? Have a category for the “we didn’t know that was coming” area of your life. It doesn’t have to be much. It might be $50 per month. But that $50 will give you the ability to provide additional support to whatever area of your life that got hit that month.


mewithoutdebt September 11, 2009 at 8:44 am

I agree with you. I like pragmatic approach in budgeting.

brooklynchick September 12, 2009 at 7:09 am

I found Elizabeth Warren’s advice on budgeting to be the most helpful – her book is called _All Your Worth_.

Leigh September 13, 2009 at 7:24 pm

I’m in my third month of budgeting and I love it. (What can I say, I’m a nerd at heart). I feel so much more in control now that I know where my money is going and can give it a job instead of just frittering it away.

MK September 14, 2009 at 10:37 am

I’ve been following this method for some time. I have set up a sort of guideline budget for myself of ideal numbers for my monthly spending which is generally a nice round number that represents my average spending from the previous year. ie: $300 for food and $200 for gas. But I don’t get down on myself if gas ends up being more like $225 because I then jsut tell myself I need to go out one less night and trim my food budget back to $275. I’m still spending from the total amount budgeted, just not the amount i predetermined for each catergory.

Kevin September 14, 2009 at 7:01 pm

Exactly. It is all one big pile of money. If you spend $10 more in one category it shouldn’t be that big of a deal.

We take this one step further by budgeting on a monthly basis — we live on last month’s income instead of planning paycheck to paycheck.

So in your example if we spend $25 more on gas then next month we plan to spend less — generally speaking we have more months where we have money left than not enough money, so it works out.

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